The fact of the matter is that Microsoft is now spending well over two dollars for every one dollar they make with the Online Services Division. These losses have been going on for almost six years in a row now. And they’re getting worse, not better.
Microsoft spends a shit ton of money on Bing — mostly on marketing it. But I don’t know a person who actually uses it. That includes people who work at Microsoft.
Some people clearly do, to be sure. But I’m not certain those people don’t also use Google.
I simply do not see a compelling reason to use Bing. While they can claim certain small things make it better, the core product is still the same basic thing as what Google is. That’s never going to steal the share necessary away from Google for Bing to really make money.
The product has to be both radically different and radically better than Google for Bing to actually win. It’s neither. Google is already cemented.
Maybe Microsoft thinks spending $3 for every dollar earned will change their fortunes. I just don’t see it. They’re trying to market their way around a fundamental problem.
People often point to the Xbox division as one within Microsoft that was losing money before it started making it. But the reality is that there are many differences. One is that those losses only went on for a few quarters, not six years. Another is Halo.
Bing needs its Halo.
I’m also still not clear as to why Microsoft thinks they even need to be in search. Because Google is? Do they also want to morph into what is essentially an advertising company from a business perspective?
It’s almost as if Microsoft woke up one day a few years ago, realized they didn’t have a good online strategy, looked to who was killing it in the space (Google) and decided to copy that. What they should have done is focus on their actual strengths. Instead, they created a new weakness.
Having said all of that, I actually think the notion of Microsoft trying to sell Bing now is silly (which is what authors Robert Cyran and Martin Hutchinson argue in favor of for NYT). It’s too late. They’re in it.
I think the course of action now may be to try radical things to attempt to really shake the industry up. Microsoft is already burning an insane amount of money and getting nothing in return, why not have some fun with it? Go crazy.
And for the love of god, focus on mobile. If that’s not yet where it’s at, that’s where it’s going.