Microsoft Has Lost $5.5 Billion On Bing Since 2009

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Microsoft Has Lost $5.5 Billion On Bing Since 2009

Posted by Unknown on Tuesday September 20, 2011 @08:01AM from the feed-the-cash-fired-stove dept.

Landing on slashdot for the first time, MightyMartian writes "According to CNN Money, Microsoft has lost $5.5 billion on Bing since its launch in 2009. But it gets even better. If you include Microsoft's other online offerings, all the way back to 2007, the losses are somewhere in the neighborhood of $9 billion. But not to worry, analysts expect Bing to become profitable in 'three to four years.'"

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It's an investment. by ge7 · 2011-09-20 08:01 · Score: 5, Insightful

Google is in the same situation elsewhere - they're spending LOTS of money to try to gain market share in Russia and China, but so far they're being crushed by the local giants Yandex and Baidu. These companies see it as a long-term campaing and have the means and money to do it. After all, it's still a lot easier to try to gain market share now than it will be in 20-30 years. Even if things are quite laid down now, they will be even more so all the time when time passes.

It's also just corporate finances. Even if Microsoft's online division loses money, it gains them recognizition and sales elsewhere. The one good thing about Microsoft is that they tend to stick to what they started. It's not like Google who might just cancel the product you're using the next day.

So if they don't keep investing to it now, they're basically letting Google have 99% of western search engine market. I really don't want that happen either - competition is good.
1. Re:It's an investment. by ynp7 · 2011-09-20 08:12 · Score: 5, Informative
  
  Microsoft "stick" to what they started? Seems to me that they throw out shit all the time. Bing is a perfect example of where they also throw out customer-facing services. Just a few years ago it was "Live Search," which failed terribly as a brand, so they threw it out and started paying people to use Bing to pump up their search rankings.
  You may also remember Microsoft Zune and Kin. Perhaps you blinked and missed those?
  Or maybe you just notice the Google ones more because, like me, you find them more useful and thus actually feel the impact when they shutdown a project.
2. Re:It's an investment. by gcnaddict · 2011-09-20 08:14 · Score: 5, Insightful
  
  The one good thing about Microsoft is that they tend to stick to what they started.
  ...unless you're a developer.
  
  How many platforms has Microsoft killed in a short timeframe in the name of the future?
  
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3. Re:It's an investment. by HerculesMO · 2011-09-20 08:43 · Score: 2
  
  Silverlight is actually great for line of business apps, but you'd never know it because they are only going to be found in corporate intranets.
  It's hugely popular though, and a great platform for what we use it for. We tried going down the Java road and saw the costs and timelines... said "fuck it" and got the Silverlight project done underbudget and ahead of time. Now I'm just waiting for my bonus that will never come :p
  
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4. Re:It's an investment. by HerculesMO · 2011-09-20 08:57 · Score: 2
  
  Sure it could, but then we have no baseline for performance either. Silverlight sandboxes everything so we know exactly what result we are going to get. Plus, we have no ruby/python developers in house, only Java/.NET, and Silverlight was the lesser of two evils for us.
  
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5. Re:It's an investment. by kirkb · 2011-09-20 10:44 · Score: 3, Insightful
  
  WPF. It was supposed to be an all-new programming paradigm, but was too little, too late. Performance was abysmal, and this never got fixed. Now it gets replaced with WinRT.
  http://fixwpf.org/
  
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6. Re:It's an investment. by Enderandrew · 2011-09-20 11:06 · Score: 4, Interesting
  
  The original point is that Microsoft doesn't always support their technologies. They can abandon them at any time.
  If you kept your accounting records in Microsoft Money, then you were screwed the moment they dropped support. If you bought all your music in the PlaysForSure (ironically named) format, then you were screwed.
  Someone countered with "Silverlight is neat and I used it" which doesn't really refuse the notion that big companies can leave you hanging at any time.
  
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A good thing... by recoiledsnake · 2011-09-20 08:05 · Score: 5, Insightful

This is a good thing because the search business is really cut throat and the cost of entry is too high for anyone else. Atleast Google is kept on toes by Bing, and people looking to get away from the increasingly all-encompassing Google have a second choice.

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1. Re:A good thing... by Yvanhoe · 2011-09-20 08:57 · Score: 3, Interesting
  
  The cost of entry is very low. Getting 0.1% of marketshare is cheap, and would get you enough money to climb to 1% and so on.
  
  It is expensive to get the capacity of Google from day 1 but the budget to start a decent moderate-traffic search engine is not null but is within the reach of thousands of companies.
  
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Just a little while by tsa · 2011-09-20 08:09 · Score: 5, Funny

"Analysts expect Bing to become profitable in 'three to four years."
That's about as long as it takes for Linux to reach the desktop.

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Re:Not so sure that Bing makes M$ money elsehwere by MightyMartian · 2011-09-20 08:12 · Score: 4, Informative

That's Microsoft's big problem. There's nowhere to go but down...
Frankly, I think dumping 9 billion bucks into your online offerings and still not being able to shake an any substantial way the market leader, no matter how you measure it, cannot be referred to as a successful strategy. I suspect that, if you include all of Microsoft's expenditures all the way back to its original MSN portal back in the Win95/Win98 days, the amount of money it has spent is far more than nine billion dollars.

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Re:Don't forget Amazon by MightyMartian · 2011-09-20 08:22 · Score: 4, Interesting

Microsoft has been trying to build a web portal for what now? Fifteen years or so? If throwing money at this problem were all it took, they'd own the web by now. And as the article notes, at least some of its increased market share has come from Yahoo, which is using the Bing engine, which means they're basically cannibalizing their largest web infrastructure customer.
If I start eating my own body parts, does that mean a net increase in protein?

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Re:Don't forget Amazon by Riceballsan · 2011-09-20 08:26 · Score: 4, Informative

You seem to be underestimating the time bing has been around, it was launched on June 3, 2009, it's already been bleeding money for 2 years straight (and that's of course pretending it didn't exist as livesearch for years before that), and profitability is still not in visible reach yet.
Microsoft & its Shareholders by geoffrobinson · 2011-09-20 09:03 · Score: 4, Insightful

I've never seen a company waste so much money just to become a growth stock again. They should have taken the massive amounts of money they spent on XBox and Bing and just given it to the stockholders.

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1. Re:Microsoft & its Shareholders by Anthony+Mouse · 2011-09-20 10:25 · Score: 2
  
  Companies don't really pay dividends anymore, unless they want to make a token gesture. There are a number of reasons for it: The tax law isn't set up to favor it, because dividends get taxed immediately whereas if the stock value is higher because the company is holding more assets then stockholders can defer paying taxes until they sell the stock. On top of that, corporate executives would generally rather buy other companies than issue dividends because it gives them control over more stuff -- why issue a dividend when you can ruin Skype instead? And related to that, executives don't like to issue big dividends because it's a signal to stockholders that the company has nothing good internally to invest the money in, which is a strong indicator of a company on the decline.
  So they issue token dividends, hoard the remaining assets and make a bunch of ill-conceived "investments" to make it seem like they're doing something productive.
That was, in part, what anti-trust was about by Mojo66 · 2011-09-20 09:45 · Score: 2

...using the billions made from the Windows monopoly to drive competitors out of other markets, another example would be the Xbox which sold for less than the production cost in order to get a foothold in the console market.
Win8 IE+Bing lock-in will succeed by kirkb · 2011-09-20 10:31 · Score: 3, Informative

I fear that the Win8 metro shell will do a very good job of locking people in to IE and Bing. They'll both work "good enough" to prevent people from seeking superior alternatives. Will you even be able to swap out the browser in the metro shell? How much effort will it take to modify Chome, Firefox, etc to be metro-compiant?

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Anti-competitive? by kirkb · 2011-09-20 10:35 · Score: 2

If Microsoft created Bing in order to deprive Google of ad revenues, how is this not "dumping" or "bundling" or some other illegal practice?

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Re:Bing Cashback by geoskd · 2011-09-20 10:43 · Score: 2

why even bother to switch over if Bing's already loaded?
One word: Principle

The biggest difference between MS and Google: Microsoft's business model is ruthless domination of any market they can get a foothold in. Google's business model is try to put out good products without being "evil".

Microsoft is ruthless and evil and they are good at it.
Google is "don't be evil" and they are bad at it.

The end result is very similar but for very different reasons. One will probably get better, the other is irredeemably bad.

-=Geoskd

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Re:Not so sure that Bing makes M$ money elsehwere by Dracos · 2011-09-20 12:34 · Score: 2

Skype already ruined Skype.
Well duh by SmallFurryCreature · 2011-09-20 19:20 · Score: 2

You expect a bonus for doing an ActiveX the next generation?
If that is how you do IT, get used to not getting any bonuses.

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