Despite public criticism for losses posted by Microsoft’s Bing, some of which even extended to calling for CEO Steve Ballmer to be replaced, the company isn’t likely to let go of their search engine any time soon. This article discusses seven reasons why.
The Figures Behind the Criticisms
Two major actions brought the possibility of Bing being sold into the spotlight. First, Robert Cyran wrote an article describing the losses caused by Bing and the potential profit of selling Bing. The article, “Bing Becomes a Distraction for Microsoft,” was later picked up by the New York Times.
Then we had the statements from hedge fund manager David Einhorn calling for Steve Ballmer to be replaced. No, it’s not hard to see why the idea picked up media steam.
According to Cyran, there would be buyers out there: Apple, Facebook, maybe even Amazon. And with the potential sales price and the reduced cost of operations, the sale would be a “boon for Microsoft’s investors,” according to Cyran. Even if that’s true, though, Microsoft has no intent of dumping the project. Here’s why.
1. Bing Has Always Been a Long-Haul Project
As described by Microsoft product manager Paul Yiu, Microsoft has a “homeowners’ mentality” when it comes to project. The company is dedicated to making projects work, even when it means posting losses.
This isn’t the first long-haul project Microsoft has taken on, either. As just one example, Xbox posted losses until Microsoft garnered the exclusive rights of “Halo.”
2. The Loss Figures Are Skewed
Is it true that Bing is losing money? Yes. Is it the big black hole that Cyran and others are describing it as? Not at all.
As mentioned over at Wired, the figures being quoted and re-quoted originate from the “Online Services Division” of Microsoft, not Bing alone. That means that data centers, cloud services, and a variety of other projects are all part of the figures being cited.
3. Bing Has a Strategy – And It’s Not Done Yet
Qi Lu, the president of said Online Services Division, discussed the strategy for Bing. For Microsoft, it’s more than just being another Google. The company is trying to become a “decision engine” that, according to Lu, is capable of “computationally discerning user intent to give them knowledge to complete a task.”
And honestly, that project has barely started.
4. The Top-Heavy Spending Is Tapering
Microsoft invested a lot into data centers, but those are up now. Then Microsoft invested in the Yahoo partnership. That will cleared by the end of this year. And Microsoft went on a hiring spree. That’s also slowing down.
Yes, the spending was big, but it was also top-heavy spending that the company made with a full awareness of the cost – and potential long-term benefits. As these costs continue to subside, shareholders should find themselves much more happy with the figures posted by Microsoft’s Online Services Division.
5. Bing Is Growing
Despite all this criticism, Bing has done an intensely admirable job of gaining ground. Bing itself sits at over 14 percent of search volume, and when you combine Bing and Yahoo, those figures breach past 30 percent. Add to that the growth from 14 percent to 24 percent click volume for search ads, and it’s clear that we’re still on an upward climb.
6. It’s Too Entrenched
So let’s say that Microsoft wanted to dump Bing, hypothetically. Their best route might be a time machine. After all, as we’re reminded by Redmond Mag, Bing isn’t just a search engine standing on its own. Bing has been integrated with maximum visibility into everything from the Xbox 360 to the upcoming version of Windows.
7. Who’s Really Going to Buy Bing?
Bing is still posting losses, and the company in the best position to turn that around is Microsoft, not Facebook, Apple, or anyone else. Plus, the Yahoo transition just barely completed, and that cost boatloads and took months. Why would another company want to step in now?
Sure, there are advantages for other companies, but there’s no way Microsoft could get anything near the full price. Tally that alongside the other six items mentioned above, and it’s clear that Bing should remain a big part of the Microsoft picture.