Microsoft has lost $9 billion on Bing

&#62; Stefan Weitz, Microsoft's director of Bing, believes that if Bing can change the way people think about search, sooner or later users will switch over from Google.<p>For that to work people would have to change the way they think about microsoft as well, not how they think about search.<p>Right now there are several ecosystems on the web that you can be part of. There is the 'social' ecosystem which governs you interactions with other people rather than with other services. Facebook, twitter, google+ etc. Then there is 'mobile', which is a gateway to a bunch of data and to information. Then there is your work and the applications you use to do that work. Finally there is search.<p>Search is different from all the others in that you <i>could</i> switch overnight to a new provider, but just like any other good infrastructure component, you probably will not do that if you are satisfied with your current provider. Search is not visible enough to warrant a conscious decision until you are dissatisfied.<p>Changing your thinking on search is one hurdle that is going to be hard to cross without say google going down for a couple of weeks or some major mishap that would make their search results unusable for any period of time. That would give an upstart a better chance at a first shot at retaining the users.<p>Changing the way you think about microsoft is going to be a very hard obstacle to clear as well. Microsoft is synonymous with software that you use on your desktop and with several botched attempts at doing search. Before you try them again you'd have to see google performing worse than the <i>best</i> that microsoft has ever presented in this field.<p>Frankly I'm surprised that they keep sinking money into this, they've clearly failed to establish a profitable beach head, meanwhile google is making money hand over fist in the exact same domain. I'm happy they do, more competition is better but for now google seems to be acing them. Microsoft will have to be very careful that 'search' does not turn in to their Afghanistan.

<i>"Bing will likely be better than Google over time, but even if it is, users and advertisers still need to go to them," said Sid Parakh, analyst at McAdams Wright Ragen. "To be clear, this will take a long, long time to play out. This is something Microsoft will continue to lose money on."</i><p>That's an example of an annoying tendency that I see in many news sources. Why is a vague quote from an investment advisor relevant here? Who is Sid Parakh and what justifies his opinion? I see nothing related to search on his linkedin profile, at least.

Please retain original article titles as per the guidelines [1]. In this case, the new title is also inaccurate.<p>This article is actually called "Microsoft's plan to stop Bing's $1 billion bleeding", and the loss on Bing alone is $5.5 billion <i>since mid-2009</i>. It was only Microsoft's <i>total online services division losses</i> that reached $9 billion, and that was <i>since 2007</i>.<p>[1] <a href="http://ycombinator.com/newsguidelines.html" rel="nofollow">http://ycombinator.com/newsguidelines.html</a>

In certain verticals, Bing really outshines Google like travel search, video search, and image search. Bing maps is really quite good.<p>Microsoft is a cash cow, and has multiple sources of strong revenue. Google has one: advertising. Microsoft can afford to bleed cash for years, just to give Google a black eye.<p>Microsoft only this past year got out from under government oversight for antitrust violations. I've spent quite a bit of time talking to people at Microsoft the past 2 years. A lot of the BizSpark team are ex-Sun people. And a number of them have mentioned to me how shocked they were at how profoundly the anti trust litigation still affected employees within the company 10 years later.<p>Windows 8 is the first OS since ME that comes out without government anti trust oversight, and it looks like Microsoft has come out swinging, both at Apple and Google. <a href="http://channel9.msdn.com/Events/BUILD/BUILD2011/KEY-0001" rel="nofollow">http://channel9.msdn.com/Events/BUILD/BUILD2011/KEY-0001</a><p>Google is just now starting to get into anti trust how water, and I have no idea how they are going to get out of it. I think Yelp in particular has a really strong case: <a href="http://www.pcworld.com/article/240330/google_faces_antitrust_accusers_expedia_nextag_and_yelp_wednesday.html" rel="nofollow">http://www.pcworld.com/article/240330/google_faces_antitrust...</a>

Another half assed analysis of Microsoft's Online Services Division.<p>OSD includes Bing, MSN, Live Mail and Messenger...aka support services they provide to their internal and external customers (e.g. Windows Phone 7 uses Live Mail). It doesn't include profit centers like Xbox Live or their various enterprise level cloud services.<p>OSD is primarily a cost center for marketing. Microsoft attributes half the value of its goodwill to OSD (US $6B).<p>[<a href="http://www.microsoft.com/investor/EarningsAndFinancials/Earnings/FinancialStatements/FY11/Q1/IRFinancialStatementsPopups.aspx?tag=msft:GoodwillDisclosureTextBlock&#38;title=Goodwill" rel="nofollow">http://www.microsoft.com/investor/EarningsAndFinancials/Earn...</a>]<p>In addition, it's revenues don't reflect any savings Microsoft realizes by advertising it's own products on it's own ad network or by promoting its own brands on MSN (e.g. stories from MSNBC).<p>Finally, the value of the data collected by the OSD is not directly reflected as revenue. That data provides Microsoft with insight regarding search, shopping, social networks, news interests, etc.

The one thing you can say for Microsoft is that they stick to their guns and keep trying.<p>With Google, you never know if a product has a team behind it or it was someone's side project that got out of hand and received too much press that they'll kill a couple in a couple months because it didn't get enough traction.<p>Now sure, in the startup world the idea of sticking with an idea and plotting along losing money is a terrible sign, but on a personal level I can't help admiring Microsoft's fierce tenacity.

The examples of "semantic search" reported in the article don't look innovative at all to me. Giving you specialized results (eg maps) based on the search query has been done for ages, and expanding on that can be useful but it will hardly be revolutionary.<p>Moreover, trying to guess the semantics of user's queries can be very annoying to some users, especially the geekier ones which are often also the trend setters in this area - there are lots of people already being pissed off by google when they search for synonyms of what you type, and not exactly what you type.<p>Competition is always good and I hope that Bing and Google will make search always better, but I'm not so sure how useful will be what was reported in this article.

Sounds like bing probably represents better bang for your advertising buck than google at this point. Could be good deals there for marketers.<p>For microsoft's part, it just seems like they're always one step behind google, which is one step behind Facebook, which sooner or later will be one step behind someone else when they've maxed their revenue from their current business and feel compelled to stray from their core competencies. History repeats itself and the young grow old.<p>Also, thought it was an interesting bit about bing gaining marketshare from yahoo (their partner) and not google. Ouch.

From last year:<p><i>When you hear the word “startup”, you most likely think of an Internet startup. Maybe it’s funded, maybe not, but its burn rate almost for sure puts it in the red each quarter. Obviously, Microsoft is not a startup. Nor have they been a startup for a long time. But what if you thought of their Online Division as an Internet startup? One funded by Microsoft. The thought it terrifying. Or it should be. To Microsoft.</i><p><i>Microsoft released their Q1 2011 earnings today. The results were very good except for one very big blemish: the Online Division. Last quarter, the division lost $560 million for Microsoft. That’s better than the previous quarter when it lost a staggering $696 million, but it’s much worse than a year ago, when it lost $477 million. In the past year, Microsoft has lost well over $2 billion from the division.</i><p><a href="http://techcrunch.com/2010/10/28/microsoft-online-business/" rel="nofollow">http://techcrunch.com/2010/10/28/microsoft-online-business/</a>

I think that I have a similar problem to many other users... It's not that Bing is a bad product, it may be the best thing out there. The problem is that I've lost confidence in Microsoft as a company to objectively serve me information. It's a trust issues that I don't have with Google or Apple... yet. Those companies have their warts too, but nothing like I experienced in the 20+ years I was locked into the MS ecosystem.<p>As long as a guy like Steve Ballmer is running the company, I will stay far away. Perhaps when management changes down the road result in MS better demonstrating that they are more interested in producing great products rather than gaining market share at any cost, I'll take them seriously again. We're starting to see some of that with windows mobile and win8.

The sad thing is that they are spending this on a fight that's largely been over for a few years. Hell, the social fight is nearing a conclusion were it not for g+, MS is not just trailing in the Internet space, they are in a time machine.

As much as I'm happy to see Microsoft losing money, this is actually very bad news. Any competition for Google is a good thing, and at this rate it won't be long before Microsoft cuts expenses on Bing...

I get that Bing is no success, but how is it losing so much money? That can’t just be developer salaries can it?

Why I don't use Bing:<p>1. I hate the stupid pictures and the other stupid fluff.<p>2. It is called "Bing" (the only worse brand name is "Yaris"... what are they thinking?)<p>3. Microsoft doesn't help fund and staff a LOT of the Free software infrastructue I depend on.

Providing the same services as Google will not get people to switch from Google, even if Bing provided somewhat better results. Google got people to switch because they didn't just provide astonishingly better results, they did things quite differently than others. If Bing wanted people to switch, they have to do something different, not just do the same things "better".<p>Bing can't win by offering "a better way to Google": <a href="http://www.youtube.com/watch?v=tYVCk10AzS0" rel="nofollow">http://www.youtube.com/watch?v=tYVCk10AzS0</a>

I suspect part of Google's success is not just front-page search but also site-specific searches (how some sites use Google as a a back-end search).<p>Perhaps more significant is their number of AdSense affiliates. (After all, search doesn't make money, advertising does.) Blog after blog and developer and developer continue to embed Google ads, and are thus themselves bound to Google and encouraging others to do so.

A couple of years ago they'd lost something like $8 to $10 billion on xbox too.

Well, Bing always feels slow and 'baroque' in visual looks. Google always is fast and has a very clean visual look. Duckduckgo is slow and has a clean visual look (and doesn't track me).<p>I use DDG. :-)

Thats a lot of money. Is duckduckgo profitable yet? I bet its not losing $1 billion per quarter. But then again I suppose Bing has hugely more market share than duckduckgo.

One wonders why with an apparent 15% share they're losing so much?<p>Also find it interesting that they're gaining share, while the article states it's from other providers but Google, doesn't that still mean that these users are actually choosing Bing over Google? That they're chosen it because it's better?