Microsoft Betting on Bing for Mobile Search

msmoriarty writes "Bing is a still a money loser for Microsoft, and the calls for the company to sell it off are growing. But according to long-time Microsoft watcher Mary-Jo Foley, dumping Bing is just not going to happen. 'While the world sees Bing as a distant No. 2 search engine, Microsoft brass and bean counters see Bing as a reusable component and asset that will be built into more and more products. Those who think Microsoft will discard Bing or sell it to the highest bidder are dead wrong — that won't happen now or any time soon.'"

Comments

Re:Google Monopoly

[AvitarX]

Monopolies are legal in the US.

You need to demonstrate their strong-arming or abuse, or the harm to the consumer.

The fact that we got easy access to a new search engine recently demonstrates that the consumer isn't harmed.

With just a 27% share of the U.S. search market

[hardtofindanick]

I don't really understand why owning 27% of the search market is being shown as a failure. It may be below expectations, but it is still considerable. The search results are more decent then ever and at least google felt threatened enough to honeypot it. BTW I still use Google.

Re:With just a 27% share of the U.S. search market

[fuzzyfuzzyfungus]

It's the "losing money" part that shareholders tend not to like... Market share certainly has its uses; but it isn't an end in itself. Some investors are more patient than others; but sooner or later they will demand that either the division stop losing money, demonstrate how its utility to other divisions that aren't losing money makes up for its costs, or be scrapped.

If anything, the fact that Microsoft is the #2 search player, commands almost a third of the market, and still isn't making money at it probably makes people more nervous about them. Losing money temporarily in order to gain enough marketshare for some sort of economies of scale/mindshare breakthrough/whatever pixie dust is floating around is practically a comforting tradition for tech market types. Being an established player and still dragging out each year in the red just makes you unpopular...

Re:With just a 27% share of the U.S. search market

[m2vq]

What I found stupid about the whole thing was the sentence

While the world sees Bing as a distant No. 2 search engine

Yeah yeah, slashdot has the FAQ point about it being US-centric site. But including the word "world"? That maybe true for US, but it varies by country. For example Yandex is the largest search engine in Russia and Baidu is in China, and they both lead Google by miles.

Re:With just a 27% share of the U.S. search market

[Hope Thelps]

I don't really understand why owning 27% of the search market is being shown as a failure.

Perhaps because they don't "own" 27% of the search market, or anywhere close to it?

Google has 83.62%, Yahoo 6.21% (not "owned" by Microsoft but I suppose you could see it as rented) and Bing 3.57%.

They may have a larger share local to you but that isn't enough to avoid losing billions of dollars on an ongoing basis. To get anywhere close to Google's market share (and thus hopefully reduce their losses) would take massive gains over what they have now.

Re:With just a 27% share of the U.S. search market

[Hope Thelps]

You're linking to global stats. not U.S. stats. Google isn't doing so great in countries like Russia or China either, and US is the most profitable market (and the GP is also referring to it in the post, see title)

He referred to it in his title, but in his post he asked why having 27% market share is seen as failure. It's a global market. Saying "yeah, but they have 100% in my house/town/city/country" doesn't cut it when people are comparing them to Google who have over 80% worldwide. Maybe you're right that the US is the most profitable market for web search (cite?) for Google or others but it doesn't seem to be profitable for Microsoft - or are all the losses for their search business arising in other countries?

Re:With just a 27% share of the U.S. search market

[UnknowingFool]

If "at first" you meant the first 6 years of existence, then you are right. When dealing with the business world, people tend to judge profit as a measure of success. While Xbox is now profitable, it has to make enough profit to pay back for those initial years of loss to break even before being considered profitable. As for other profitable ventures, can you name a few. I'm not aware that MS makes profits outside OS and Office and now Xbox at least not according to their own financial statements.

Re:With just a 27% share of the U.S. search market

[NoOneInParticular]

Eyeballs are not worth the paper they're printed on. That's what 2001 should have taught you.

At around 30% marketshare

[PickyH3D]

What incentive does Microsoft have to ceding search (and search related ads) to Google? It has nearly 30% US marketshare and it's growing (combined with Yahoo, which uses Bing for its backend).

When Bing first launched, Bing scared Google and forced them to start innovating again. Competition is good after all. Even if Bing dies off, I see no advantage, as a consumer, to have Bing disappear. I also see no advantage, for (not as) an investor to cede that entire domain to one of their two biggest competitors. Throw away the entire investment that has signs of paying off in the future, and give a major investor even more money to play with to cut into your market? That's really the best idea?

Having some competition certainly helps spur production and innovation. After all, Windows Vista took so long because they had no serious competition until OS X started seriously stealing the spotlight. Apple gave them a good reason to produce faster, and at a higher quality (Windows 7).

Re:At around 30% marketshare

[MightyMartian]

Vista took so long because they had to keep turfing Longhorn functionality because all those teams had produced virtually nothing that was ready for market. Vista was about as much evidence as anyone needed that Microsoft had lost its edge. Even now, Windows XP is still newer versions of Windows worst competition.

As to Bing, Microsoft has thrown so much money at it and basically bought the penetration they would have gotten if they had just left up msn.com or live.com as the default page. It has been an extraordinary waste of money, costing well in excess of the vast and largely pointless investment in building THE web portal that Microsoft has been trying since Windows 95.

Bing's big victory so far? Why, Yahoo, as it sinks into the forgettable soup of yesterday's companies, started using it as its engine.

Re:At around 30% marketshare

[Animats]

Bing's market share isn't all that bad, for only two years into the market. Microsoft has lost money entering a market before; the original XBox was a money drain from start to finish. A decade later, Sega is out of consoles, Sony is in trouble, and Microsoft is finally #1 in console sales, having passed Nintendo this year. Microsoft is finally profitable in games, although it's not clear if they've made up all the early losses yet.

Microsoft's online services division is losing about US$2bn a year, but that group includes more than Bing. Microsoft has a whole range of online services, many part of "Windows Live", mimicking many of the services Google gives away to annoy Microsoft. The search engine itself probably generates enough ad revenue to support itself.

Microsoft went at online from the opposite direction as Google. They did the money-losers, like free email, first, then the search engine with ads, which makes all the money. Microsoft, like Google, has recently been dumping some of the less successful freebie products. That can't hurt.

Bing has a brain drain. They've been losing key technical people and execs to Facebook, eBay, and even AOL. I'm not even sure who's running Bing right now. (Does anybody know who the top 3 people are at Bing right now? Let me know.) They're hiring, if you want to work in search.

Bing could potentially do a better job at search than Google. Google gets 30% of their ad revenue from AdSense sites, and has been hesitant to bring the hammer down on made-for Adsense junk sites. Bing could do better just by penalizing sites with ads, content farms, and related junk, like Blekko does. Google is vulnerable there.

2.6 Billion In Losses Just This Past Year

[AddisonW]

http://www.nytimes.com/2011/07/25/business/bing-becomes-a-costly-distraction-for-microsoft-breakingviews.html

I don't know how anyone could possibly suggest anyone would ever dream of wanting to buy Microsoft's failed search engine.

Re:2.6 Billion In Losses Just This Past Year

[Missing.Matter]

I feel this view is very myopic. Obviously a product has more worth than the exactly dollar value it brings into the company. Bing is obviously core to Microsoft's overall strategy, and it has the potential to generate incredible revenue in the future. They could be very willing to nurse it through infancy and incur years of losses. Other companies who might purchase it potentially do not have the cash hoard to do this. The author mentions Facebook as a potential buyer. Does he seriously think Facebook has the cash and clout to take on Google in the search arena?

Further, we don't know precisely how much Bing is losing Microsoft. Microsoft reported $2.6 billion in losses in their Online Services, which is composed of much more than Bing: MSN, Windows Live Mail, Windows Live Messenger, Exchange, SharePoint, Live Meeting, Office Communicator, etc. Obviously Microsoft has a lot more information than us about exactly how well Bing is doing, and they're keeping it.

Re:Google Monopoly

[TheNinjaroach]

The fact that we got easy access to a new search engine recently demonstrates that Google isn't a monopoly.

Bing

[the eric conspiracy]

Microsoft brass and bean counters see Bing as a reusable component and asset that will be built into more and more products. Those who think Microsoft will discard Bing or sell it to the highest bidder are dead wrong â" that won't happen now or any time soon.'"

This is the sort of reasoning that led me to sell all of my Microsoft stock years ago. Glad to see that I made the correct decision. Clearly none of the brass and bean counters have ever pruned a tree.

Why Microsoft keeps Bing around

[Anonymous Coward]

I worked in Bing for a several years as an SDE until leaving recently. The Online Services Division in which Bing resides is losing money at an alarming rate. In the last fiscal year ending June 2011, OSD lost $2.5 billion.

Why is Microsoft in this space? I heard it from Bill Gates himself at a team function last year. If Microsoft does not put up a fight in online search, Google will continue to encroach on Microsoft's cashcows, Windows and Office, with their product offerings. I don't think anyone in Microsoft really is driven to make an honest-to-goodness better search experience; Bing is just Microsoft's 70%-Achieved beachhead in online search just to keep Google honest.

Re:Google Monopoly

[91degrees]

But we're not really the customers. The customers are the companies with websites who want to be visited on the internet and they have to do what Google demands.

Re:Sad

[Fantom42]

Why does that data belong to you, or anyone who generated it? You aren't the ones that paid to collected, index, and stored this information. The information belongs to Google.

Change. The. Name.

[blair1q]

If anything makes me have no respect for Microsoft's search engine, it's the embarassingly stupid name they've given it.

"Google" is fun. "Bing" is childish. And tying it to a trademarked sound is just brand-development masturbation right in the face of your potential customers.

Quit it.

Bing!?

[Culture20]

I totally forgot that it existed. Maybe they should spend some more money on advertising.

Re:Aww! Poor Liddle MS Fanboy

[H0p313ss]

And now I have a bad 80's tune stuck in my head: "... this is what it sounds like, when tolls cry...."

Re:Sad

[orient]

Feel free to give your data to Bing, by searching with Bing.

Re:Sad

[Dog-Cow]

It's nothing at all like Office file formats.

And data is not copyrightable, which is why the data in the phone book is (legally) copyable. It is true that the data Google collects is also not copyrightable, but that doesn't mean Google has to give it to anyone. (The phone book is distributed to subscribers.)

That's an interesting choice of words...

[Crudely_Indecent]

While the world sees Bing as a distant No. 2 search engine

This is Slashdot, where curse words in posts and comments are allowed. So, it's perfectly OK to say "Bing...shit search engine"

What did these execs expect?

[Code Yanker]

I'd be curious to find out what Microsoft's initial goals were. Surely the bean counters did not expect breaking Google's stronghold on search would take a mere two years? In most tech markets, a ton of competitors show up, duke it out, and one of them eventually emerges as the clear winner and we all go home. Any companies that show up after that have to either sell niche products or EXTEND the market in some way. It looks like MS tends to take an unusual strategy here on many products, not just Bing. Bing faces Google pretty much head on and any bean counting MBA knows that will be a very expensive and long term investment. Investors certainly care more about the heres-and-nows but execs care about reaching goals. If Microsoft is reaching its goals (anybody see their last quarterly?) I imagine they will continue with their old strategy of showing up late and dumping tons of money into experimental projects that compete directly with established market champions. I'm no business analyst, but it looks like MS loves to have its fingers in every little place where software exists, in some small-but-significant corner of the market, for the infrequent moments when it gains dominance and gets some incremental shread of long-term relevancy.

Bing already losing mobile market...

[Endophage]

Towards the end of last year I bought a Samsung Fascinate on Verizon. It only had the Bing search widget, no Google search widget, even though it's an Android phone. There were plenty of ways to work around that problem (yes, Bing was a problem for me, no matter what MS do their search engines consistently fail to provide me with relevant results, maybe I'm just difficult) like simply adding google.com as a bookmark in the browser. Couple of extra taps but not impossible.

Around the same time a number of my friends bought the same phone. They had the same complaints about Bing and no Google search widget.

A few months ago, Verizon finally pushed the Android 2.2 update to the Fascinate which included the Google search widget. I now don't know a single person who uses the Bing search widget. Attempting to force people to use your products through deals with various vendors is not the way to build market share.

strength and weakness

[Tom]

We've seen this pattern before. Repeatedly. MS greates strength and greatest weakness at the same time is their ability and will to stay beyond losses that would've ruined most smaller companies.

Sometimes, this staying power makes them pull through in the end. Sometimes, it means they just burn even more money.

It's the typical MS way. No, they won't sell Bing. They will hang on to it until it either turns a profit, or is so dead that not even the braindead who fall for 419 scams would buy it anymore. Then they will kill it silently, when the press is looking the other way. They don't like to admit failure.