Print 25 comment(s) - last by johnsmith9875.. on Sep 28 at 2:17 PM

Microsoft's Growing Search Loses  (Source: CNN)
Bing may never turn a profit

Microsoft has been trying to compete in the search market with its Bing engine and hasn't been doing well. Google is still the runaway king of search and Microsoft is showing little signs of offering up meaningful competition.

Microsoft is taking a beating with Bing, and CNN reports that the search engine is losing Microsoft almost a 
billion dollars per quarter. Since Bing launched in the summer of 2009, Microsoft has lost $5.5 billion on the service and the losses are flowing faster than ever today.

Not all of the losses can be blamed on Bing though. Apparently, Microsoft has never made money on its search offerings. Since it embarked into search arena, the total mount thrown away amounts to $9 billion.

Bing has 14.7% of the search market and is proud to proclaim it is gaining on Google and has taken share from the search giant. CNN, however, points out that the gain Bing has made in the search market is in fact not coming from Google, but third place Yahoo. Since Bing launched, Google has lost market share slightly from 65% at Bing's debut to 64.8% today.

Half of the gains Bing has made came from Yahoo according to CNN and the rest of the gains came from and AOL.

Microsoft is looking to build its market share with partnerships for search with Facebook and with Nokia. Microsoft and Nokia are tying up for a big push into the smartphone market with Nokia being a premiere Windows Phone 7 partner. 

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Who's cooking the books?
By SiliconJon on 9/22/2011 1:39:00 PM , Rating: 5
Are they building UFO's? Underground bases? Moon bases!?!

Or maybe something more earthly like laundering money? Drug smuggling? A front company loss for what?

Seriously, a billion dollars per quarter? That's four thousand people on a million dollar salary just sitting around playing Halo. Is there a position opening up I can sneak into?

RE: Who's cooking the books?
By Solandri on 9/22/2011 2:09:26 PM , Rating: 5
Early on they were literally giving away money. You could buy stuff off eBay via a Bing link and Microsoft would pay you up to a ridiculous 25% of your purchase price back. Alas they shut down that program earlier in the year. Now I suspect most of the money is paying for the Bing bar to be auto-installed when you install various software.

I think Microsoft is carrying over too much of its desktop Windows and Office mentality here. But unlike OSes and apps, you are not beholden to a single search engine for the sake of compatibility, so paying people to use your service won't necessarily make them stick to it. People can and will switch on a whim. Altavista and Yahoo were the early search leaders. Google crushed them because their search generated better results, not because they paid people to switch.

One area where I can see someone improving on Google is separating out commercial sites from content sites. Whenever I search for a review of a product, I have to sift through pages of store ads ("be the first to review...") in Google's results to pick out a handful of real reviews. If Microsoft would concentrate on improving things like that, they'd start stealing market share from Google.

RE: Who's cooking the books?
By Breathless on 9/22/2011 3:07:27 PM , Rating: 4
Nice idea, I hate those crappy non review - review sites.

RE: Who's cooking the books?
By augiem on 9/22/2011 5:14:49 PM , Rating: 3
I totally agree. Google is infested with ads and spam sites. They claim to have all these wonderful algorithms to sort content, yet they fail so miserably.

I'm also tired of the latest trendy stuff always coming up at the top. This is more like an adware/trendsposting engine than a meaningful content search system. It's plain to see the algorithms are focused on what's hot NOW, not an overall search of the archive that is the web.

RE: Who's cooking the books?
By augiem on 9/22/2011 5:16:43 PM , Rating: 2
when I said "sort content" I meant filter content.

RE: Who's cooking the books?
By skibum415 on 9/23/11, Rating: 0
RE: Who's cooking the books?
By B3an on 9/23/2011 1:38:17 PM , Rating: 1
I find many Bing areas to be better than Google. Infact Google has recently copied Bing in areas, like the way image searches are now displayed.

RE: Who's cooking the books?
By JonnyDough on 9/23/2011 3:02:22 PM , Rating: 2
Bing certainly has come a long way with filtering/sorting options. In fact, Google could be just a bit better at these things IMO. I'd have to check, but does their shopping feature still say "beta" on it?

RE: Who's cooking the books?
By johnsmith9875 on 9/22/2011 3:17:08 PM , Rating: 2
Microsoft really failed when users couldn't Bing on their Zune

RE: Who's cooking the books?
By johnsmith9875 on 9/28/2011 2:17:06 PM , Rating: 2
Microsoft is part of the National Reconissance Office of course. They're the new $400 hammer and $2000 toilet seat procurement-wise. Bing is just a cover expenditure.

Bad chosen name!
By mxnerd on 9/22/2011 2:54:13 PM , Rating: 4
It's the name that ruined the search engine!

It sounds very unprofessional when you say "I just Binged." instead "I just Googled."

RE: Bad chosen name!
By Smilin on 9/22/2011 4:07:07 PM , Rating: 2
LOL. Yes of course "googled" is so professional sounding. Whenever you say it your clothes self iron and you get a magic haircut.

RE: Bad chosen name!
By mxnerd on 9/22/2011 5:11:30 PM , Rating: 3
And the pronunciation of "bing" means "sick" in Chinese!

I'm sure Chinese people don't want others thinking they were just sick!

Expense =/= Loss
By spread on 9/22/2011 2:07:04 PM , Rating: 4
Bing is an accessory to the Microsoft ecosystem, it's a necessary expense to tie everything together. This work in WP7, it's a very important part of the software especially with it's maps feature which isn't the best but it's getting an upgrade very soon. It will be even more important in Windows 8.

Just because they're spending money on it doesn't mean they're losing money on it. It helps add polish and tie everything together.

RE: Expense =/= Loss
By Flunk on 9/22/2011 2:37:26 PM , Rating: 2
You're probably right, the web services division supports their profitable products very well and provides an cash sink for tax purposes.

RE: Expense =/= Loss
By idiot77 on 9/23/2011 11:23:16 AM , Rating: 2
I love people that fail at accounting. Taxes are a percent. You never "make money" on tax sinks. You just seem to "lose less" so you're willing to invest it. One of the things we need to fix. Start taxing money that is being held onto instead of money being invested.

By fishman on 9/22/2011 1:31:18 PM , Rating: 2
Half the gains Bing made came from Yahoo? But isn't Yahoo now using Bing as its search engine?

RE: Yahoo
By semiconshawn on 9/22/2011 3:43:08 PM , Rating: 3
The answer to your question lies in your question. If yahoo's numbers are now added to bing's numbers.....

So what?
By dagamer34 on 9/22/2011 1:52:53 PM , Rating: 2
Bing doesn't have to make money anymore that Google Plus Makes money for Google. It's subsidizes to benefit other services like Windows for Microsoft and generate data for Google Adwords.

Especially with the level of integration BIng will be getting in Windows 8 and the Xbox 360, it's not something you can just yank out and sell off or close. Anyone who makes such a suggestion isn't looking at the big picture.

RE: So what?
By woofersus on 9/22/2011 2:25:39 PM , Rating: 3
Right, it's part of the ecosystem. Bing is as much about xbox, windows, windows phone, windows live, and other products as it is about making money off of search terms. Microsoft has a different business model than Google does. Google doesn't need to make money on Android because it's all about the ad revenue from search. Microsoft is a software company and needs to make money from software they invest a ton of money developing. On the other side of the coin, Bing as a profit center is dependent on the success of windows phone, windows 8, windows live, xbox, and other various services.

Microsoft needs a critical mass of users in order to make advertising through Bing a viable revenue stream. This takes time and a large investment. (and they do pay people to code stuff and make commercials, btw, so it's not like they're costing the country jobs through Bing) The MS ecosystem has been a bit disjointed in the past, (certainly compared to Apple and Google) but they are making a pretty concerted effort over the last couple of years to get it off the ground, and it's starting to show great promise.

Too much money
By Dug on 9/22/2011 7:50:29 PM , Rating: 2
I wonder how much they would loose if they just offered it as a search engine. Drop advertising, paying places to install, etc.

RE: Too much money
By Gondor on 9/23/2011 3:53:40 AM , Rating: 2
Agreed. Google has become so incredibly bloated over what it was only a year or two ago. There's plenty of room for competitors to come up with simple sleek and quick-to-laod design that doesn't add unnecessary "features" that obstruct field of view (where results used to be displayed across entire width of the screen) which cannot even be removed.

There is no need for lame "suggestions" (turning these on should be optional ), fancy graphics (which consume bandwidth and take longer to load on portable devices than the "stock" logo which is cached after first use anyway), etc. Stupid ads take majority of the first result page. Results aren't ordered by usefulness anymore (used to be implemented via number of references to a page and other criteria, now it's just by the amount of money paid to Google).

That, and incessant peddling of crappy data mining services (Blink ? Plus ?) makes it painfully clear that Google has gone down the drain like Altavista did just before the emergence of Google so it is time for somebody else to take the leading role in the world of online search. With billions wasted perhaps that just might be M$, even though they're threading dangerously close to Google's bloaty "design".

By Sylar on 9/22/2011 2:02:03 PM , Rating: 3
Bing that back and I might use em again. :P

It could make more...
By Ranari on 9/22/2011 7:23:56 PM , Rating: 2
Bing will lose a lot more money until it finally makes a profit. Sadly, I think was probably an idea-too-late. People don't access the internet the same way they used to. I feel the idea was probably contrived back in the day when people would log into the internet through source providers. That is, you log into AOL, or Yahoo, or one of these media companies that would provide a portal gateway to the internet. This is back when the internet used to be like navigating troubled waters. People just have a lot more experience now than they did 5 years ago browsing the internet. They know what they want. They know what they're looking for, and I don't know of that many people that spend all of their time searching all day for things on the internet.

The second issue I have with Bing is that it's advertising portal, the Microsoft Adcenter, just isn't that easy to use. It's clunky. It's not very intuitive. It's painfully slow, too. It's also rather limited as well. How many potential small business advertisers are turned away from using Adcenter by their first experience? How many potential advertisers do you think are burned because they didn't know about a setting, and it ended up costing them hundreds of dollars. You know, a lot of the reason Google is successful is because they've developed an ad platform that "just works". Sure, it has its issues, but this is one area that Google has a huge leg-up on Microsoft, and they're losing millions because of it.

Then there's the issue with tracking. This involves more medium sized businesses, but I'd imagine they're a large revenue source if Microsoft would realize it. I have a few friends who work at SEO companies, and of the issues they have is that Adcenter advertisements are hard to track. A lot of the track programs are built with Google in mind, and not necessarily Adcenter. As a result, they don't advertise because they have a hard time justifying sales to dollars spent if they have no way of knowing if a Bing click converted or not. Sure, you can use the built in Adcenter tracking, which works, but companies rely on their own tools to do that. Google Analytics doesn't recognize Adcenter traffic out of the box. You have to program it in yourself, and Microsoft doesn't help you do that.

So there's a lot things Microsoft could do to improve their revenue here. I've heard through the grapevine that Bing is actually an amazing revenue source if you know how to use it. Conversion rates are high, and click costs are low. Sadly, it's too complicated to use for an individual with some SEO experience. If Microsoft could work on that, I think they'd trim down those $4B yearly losses in no time.

Ballmer's Genius...
By nukunukoo on 9/24/2011 10:42:13 AM , Rating: 2
Remember years ago, just as Google started to become popular that Ballmer said that Search Engines are an incredible tech worth investigating?

Neither did I.

"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home

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