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Microsoft Has Lost $5.5 Billion On Bing Since 2009 217

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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Microsoft Has Lost $5.5 Billion On Bing Since 2009

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  • by ge7 ( 2194648 ) on Tuesday September 20, 2011 @04:01PM (#37459570)
    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.
    • I'm not so sure that you have it right when you say "Even if Microsoft's online division loses money, it games them recognition and sales elsewhere."

      Microsoft has a near-monopoly on the operating system and office productivity. Isn't that how they make nearly all their money? How does Bing help with that?

      • by MightyMartian ( 840721 ) on Tuesday September 20, 2011 @04:12PM (#37459716) Journal

        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.

        • They seem to have run out of ideas, like Dell in the hardware space. Waiting for someone to spot/create a market and then validate by growing it before making any move means you're always simply too late. It's not fatal in hardware, or even in software, but in online where network effects are even stronger, 2 years late = very uphill battle. See Windows Phone, bing, Azure, ...

          MS need to be first... somewhere... and then milk that relentlessly, like Google is doing with search and online profiling.

          Buying Sky

        • by gutnor ( 872759 )

          I think dumping 9 billion bucks into your online offerings and still not being able to shake an any substantial way the market leader

          That is a bit scary as well. There is only Microsoft actively going against Google (at least in the markets that affect me the most - the western world). Google is sitting on a pile of personal information, a real goldmine that their advertiser client would dream to tap. You need some serious competition on the market to help them continue to make the right decision (i.e. leave our data alone)

          • The thing is if you read the article, Microsoft isn't having any impact on Google at all. They're just killing everybody else. When they stop dumping money on this bonfire, where are all those people going to go? Google.
        • by EdIII ( 1114411 )

          They are going down and will continue to do so. They will be lucky to find a balance and just stay alive.

          People are buying laptops and desktops, and for the vast percentage, it is a MS operating system. Apple gained market share and MS went down. That might not last forever, especially if Google actually does something with an OS that takes off. Windows 8 really really needs to be good here.

          Now the whole new thing is tablets. MS is not exactly very strong here. They are just starting out with their ne

    • by ynp7 ( 1786468 ) on Tuesday September 20, 2011 @04:12PM (#37459726)

      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 [clubbing.com] 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.

    • by riley ( 36484 )

      Hailstorm, Silverlight, Passport, MSN, Bob...

      MS is the same as any other large company. Outside of their proven revenue generators, they throw a bunch of stuff at the wall and see what sticks. Not that I mind competition in any space, but still...

      • 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

        • Microsoft has been removing Silverlight from their own websites and replacing it with HTML5. And Metro Tiles and Windows App Store apps won't support Silverlight. I'm going to go out on a limb and suggest your project probably could have been accomplished with Ruby. JS, Python or a number of other technologies just as fast.

          • 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.

          • Microsoft has been removing Silverlight from their own websites and replacing it with HTML5. And Metro Tiles and Windows App Store apps won't support Silverlight.

            Neither of which are relevant for GP's use case, which is internal app deployed on a corporate intranet.

            • by Enderandrew ( 866215 ) <enderandrew AT gmail DOT com> on Tuesday September 20, 2011 @07:06PM (#37461922) Homepage Journal

              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.

        • 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.

    • by gcnaddict ( 841664 ) on Tuesday September 20, 2011 @04:14PM (#37459748)

      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?

    • Competition is good, but Bing is hardly worthy competition.

      • From a utility perspective, Bing doesn't have to be competitive. If Microsoft can force market share through other manipulations, it all amounts to the same thing in the end. Except, of course, for the users, but they don't count.

    • by cyborch ( 524661 )

      The one good thing about Microsoft is that they tend to stick to what they started.

      Unless you're using Virtual Earth [msdn.com].

  • A good thing... (Score:5, Insightful)

    by recoiledsnake ( 879048 ) on Tuesday September 20, 2011 @04:05PM (#37459626)

    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.

    • and people looking to get away from the increasingly all-encompassing Google have a second choice.

      And that choice is a plucky underdog by the name of... Microsoft.


      • by bedouin ( 248624 )

        Or DuckDuckGo, who is going back to the roots of what made Google good in the first place: clean interface and decent, mostly spam free results.

    • Re:A good thing... (Score:4, Interesting)

      by Yvanhoe ( 564877 ) on Tuesday September 20, 2011 @04:57PM (#37460360) Journal
      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.
    • by Dunbal ( 464142 ) *

      and people looking to get away from the increasingly all-encompassing Google have a second choice.

      When did they get rid of Yahoo, Alta Vista and Lycos?

    • MS took a lot of arrows when the XBOX came out and they lost a ton of money... I think they are profitable now.

      • by 0123456 ( 636235 )

        MS took a lot of arrows when the XBOX came out and they lost a ton of money... I think they are profitable now.

        Last I saw they were making a small operating profit but were still a long way from paying back the development costs. And they'll have to build a new Xbox soon unless they want games to continue looking like a PC from 2005.

        • I think the idea of bringing PC games to a console looks like a no-brainer now. PC stuff is so much cheaper now than six years ago I think they can do a new one without taking such a large loss on the hardware.

            I guess we will see.

      • They are no longer losing money year over year, but they are nowhere near making back the initial investment. And there is no guarantee at all that they ever will -- it will take them many more years and it seems extremely likely that before then games will no longer be played on consoles, in favor of e.g. mobile devices connected to TVs and controllers by wifi.

    • I hate to break it to you, but Bing has a very long way to go to make it that far up the list.

  • by tsa ( 15680 ) on Tuesday September 20, 2011 @04:09PM (#37459684) Homepage

    "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.

    • by Dunbal ( 464142 ) *
      Or sustained fusion to happen.
    • Funny that's what they said about linux when Windows ME came out
  • Microsoft...you would have gotten a better ROI building a moon base.

    (Now waits for Apple to build a Moon Base)

    • Called iMoon, and then Apple promptly sues the Japs and Americans for sending probes there and violating its IP because "they clearly ripped us off by booting thrusters on the ass end..."

    • > Microsoft...you would have gotten a better ROI building a moon base.

      Yeah, and then at least they'd have had world domination... oh, wait...

  • The first few commercials were creepy in lieu of quirky and I chalked it up to a fluke.

    But they haven't gotten any less creepy. I actually feel like I'm getting germs whenever I use anything with the Bing logo on it.

    • If you think those are creepy, you should see the rejected ad for the Zune. Colored paint shooting out of a guys ass onto a wall. Yeah, it got rejected... but it kinda makes you wonder where the threshold is. MS has terrible marketing. The downside to their lock-in on Windows, I suppose: they aren't used to having to market their product any more.
      • by blair1q ( 305137 )

        They don't have lock-in.

        Linux is gaining on them, especially in nontraditional spaces, and Apple could rear up and eat their lunch at any moment.

        Windows 8 is a very cagey reaction to that, as it's no longer Windows at all.

        • In the business market, yes they still have lock-in. Hell, the small business I work at sells Linux appliances, and we still absolutely need Windows for many applications. Linux just doesn't have equivalent business applications, pure and simple.

          And Windows 8, for all it's many changes, is still almost identical functionally to 7 (which might mean it won't sell well... but we'll see) they have just integrated a tablet-friendly interface with it. Again, how well that actually works and sells, we'll see, but

          • by blair1q ( 305137 )

            Video games are a driver issue. Windows gives the computer over entirely to the game. Linux does too, but has more niggles with card interfaces because it has no consistent relationship with card vendors.

            That could change if the card vendors realize they can package games for something other than Windows. Like, say, Android. Then the card vendor has total control of the interface.

            There's no Angry Birds desktop for Windows.

  • That's like 3-4 generations, in technology...

  • That's a lot of Bing bling.

  • They'll make up for it in volume.

  • Bling-Bling? Money wasted on shiny object...
  • I wonder if Bing Cashback payouts are included in the losses? If you frequent any deal sites, they gave away a metric crapton of cash trying to push Bing as a shopping search engine. I'm sure they just considered this marketing. In all fairness, it worked to some degree. While Google is still my most used search engine, if I'm on a computer that's set up to default to Bing...I'll actually use Bing. It's a good search engine and I wouldn't have known that had I not participated in so many Bing Cashback

    • by geoskd ( 321194 )

      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.


  • by geoffrobinson ( 109879 ) on Tuesday September 20, 2011 @05:03PM (#37460430) Homepage

    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.

    • 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

    • MSFT hasn't kept up with inflation or bank rates. I don't know why they have stockholders.

  • ...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.
  • Sammy: Sol, You’re selling chickens for less than you’re paying for them. How do you make a profit?
    Sol: One word, volume!

  • by kirkb ( 158552 ) on Tuesday September 20, 2011 @06:31PM (#37461564) Homepage

    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?

    • by Riskable ( 19437 )

      No, you will not be able to swap out the browser in the Metro shell... Metro apps can only be installed via Microsoft's app store and their app store license explicitly forbids apps with GPL or GPL- like licenses.

      Also, you can forget about getting around such limitations by implementing something like Chrome Frame... IE 10 won't support plugins!

  • by kirkb ( 158552 ) on Tuesday September 20, 2011 @06:35PM (#37461612) Homepage

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

  • its one of the things you can afford to have when you are sitting on that much of a stock pile of money.

    its all about the long-term.

  • Liked his voice, and he worked well with Bob. And as for Dorothy Lamour ...

"I will make no bargains with terrorist hardware." -- Peter da Silva