The Microsoft money pit
As a business owner what would you do if a department was losing the company a rather worrying $1bn per quarter, with a total negative balance sheet of $5bn since inception in 2009? Would you decide to do away with the associated staff altogether, downsize the team, or find new, profitable roles for the people currently costing so much corporate cash?
Well if you’re Bill Gates and his trusted team of boardroom types the answer is to do absolutely nothing. Last week it was announced that Microsoft’s search engine, Bing, has been costing the technology giant roughly $1bn per quarter, a situation that can continue indefinitely. The firm has such healthy funds saved up that this figure, while being no doubt halfway towards the GDP of some small island-states, is actually small change, and isn’t really impacting on the health of the business, a point proven by the fact shareholders have just been informed about a 25% boost to dividends.
Of course it’s not that Microsoft doesn’t want to increase the market share of Bing. And reports are already pointing to how this could be achieved, primarily through focusing on corners of the web Google has either forgotten about, overlooked, or failed to tap into successfully, with examples including the use of Bing as Yahoo’s search engine, in the Windows mobile OS, and integrated within location based apps and services. However, as Neowin.net reported after CNN broke the news surrounding this seemingly never ending money pit, in order to stop haemorrhaging money Bing needs to double its market share, and overcome the fact Google is a verb and a noun, meaning like a Tannoy PA system, the very action of web searching is intrinsically linked with the world’s number one search tool. Whether the ‘global underdog’ manages to achieve this challenging goal remains to be seen, but with the promise of ‘ongoing experimentation’ the forthcoming attempts to claw back user numbers should make for an interesting spectator sport, if nothing else.