Wired contributor Tim Carmody, in response to a piece written by Reuter’s columnist Tim Cyran last week in which he argues that Microsoft should sell Bing, provides a range of reasons to explain why Microsoft, won’t, can’t and shouldn’t unload Bing.
First Carmody summarizes the argument by Cyran, and the reaction and buzz from industry insiders to his piece, which received a good deal of attention. Cyran explains that Bing continues to pull in substantial losses for Microsoft, logging a whopping $2.6 billion loss in 2010, an increase over the previous year. Bing is a big reason its home division at Microsoft, the Online Services Division (OSD) is losing money. OSD lost $2.56 bn last year and over the past year it has lost a whopping $8.5bn.
But Bing has been growing and capturing more share of the market as well. Over the last two years Bing has increased its share of the U.S. search market from 7.2 percent to 14.4 percent, and if Yahoo’s portal , which is powered by Bing, is included, its total share of the U.S. search market is an impressive 27 percent.Cyran recognizes that Microsoft has built Bing up, but it continues be a drag on profits, and does not serve the interest of Microsoft’s shareholders. Facebook, Cyran says, because of its strong relationship with Bing and because it already integrates Bing results in its search results, is better suited over the long run to manage Bing.
But Carmody argues, based on the analysis of industry insiders regarding Bing’ deep integration with other Microsoft products, especially in the mobile space, that even if Microsoft did wish to unload Bing, it couldn’t. And Microsoft’s strategy with Bing, while currently logging big losses for OSD, may still pay off over the long run.
Mary-Jo Foley, who has been writing about the tech industry for 25 years, with a focus on Microsoft, wrote an article on July 26th titled “Why Microsoft won’t dump Bing.” Foley concedes that OSD is losing money and it is hard to see thoughtful planning in some of its marketing strategy, but Bing is part of every Microsoft platform from Windows 8, Windows phone 7, streaming video. And live TV on the Xbox.