Bing is a loser but Microsoft won’t drop it
Should Microsoft sell off Bing, its Google-baiting search (or decision) engine? Maybe it should, but it won’t.
Microsoft’s Online Services Division, of which Bing is the main attraction, ended the 2011 fiscal year with a loss of $2.56 billion. This is a 9.4 percent bigger loss than last year, and represents a colossal amount of money which shareholders would surely rather not be losing on an annual basis. Microsoft is unlikely to ever see a return on Bing, having to sink money into the division from now until the end of time. But that actually doesn’t matter.
Writing for The New York Times, Robert Cyran suggests that Microsoft sell off Bing altogether, with Facebook, or even Apple, considered possible buyers. But this argument as to how Microsoft should proceed is inherently flawed, and here’s why.
Microsoft is fully aware that its Online Service Division is making a loss, and it doesn’t care. Why? Because it knows there is a much bigger play going on behind the scenes than is immediately obvious on the surface.
As Mary Jo Foley at RedmondMag concisely explains, Bing, and the OSD as a wider entity, is there, and having money plowed into it, for a reason. Bing is an integral part of other products, notably Windows Phone 7. And this cross-platform integration is only likely to increase as Bing powers the upcoming Windows Live TV and forthcoming versions of Xbox Live. Even beyond that there is Windows 8 on the horizon, and Bing could have a part to play in the success of Microsoft next operating system.
In essence this can all be condensed into Microsoft seeing Bing as a loss leader, not able to make money on its own back but there to support and foster other products and services. And it’s for this reason that the company would be dumb to dump it, especially in the lap of one of its main competitors.
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