The real value of buying a technology company is the talent that comes with it. Sure, the technology is good, but you will need to continue innovating or else the technology will become obsolete. For that you need the talent. In company acquisitions what many times happens is that the talent just runs away which sort of defeats the whole point of buying the company (unless you just care about patents). Because of the risk of loosing the talent I don't think buying Bing is such a good idea, especially since it will cost billions. I wonder if it would be better for companies like Apple/Facebook to just develop their own search engines themselves. In fact, I would be surprised if Apple doesn't have some people working on something like that, even if just for R&D and it never goes anywhere. I know I would have a couple of smart people working on it.
Bing Becomes a Distraction for Microsoft
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Re: Bing Becomes a Distraction for Microsoft
#22As is typical, the article talks about Microsoft's online services division without any analysis of it's role in Microsoft's corporate strategy.
Considering that OSD does not include profit centers related to cloud computing such as sharepoint, and the substantial goodwill OSD provides Microsoft (over $6 billion in 2010), valuing OSD as if it were the whole of Google, is just poor journalism.
Comprised of both Bing and MSN along with an advertising platform, among the roles of the Online Services Division is to provide a channel by which Microsoft can promote it's products to consumers - e.g. Microsoft does not pay to advertise Windows 7 on MSN or to place advertising for SQL server alongside Bing search results. [I'll leave aside my hypotheses about the value of Bing as a research tool and as a strategic way of keeping Google from datamining queries from Redmond].
[Link to 2010 Microsoft 10-k: see Part II Item 8 Note 10] http://apps.shareholder.com/sec/viewerContent.aspx?companyid...
Re: Bing Becomes a Distraction for Microsoft
#23The big deal here is a lack of efficiency. Apparently revenue is $2.5 bln and losses are also $2.5 bln. That means with double the revenue (i.e. nearly Google's market share) they'd barely be in the black. Maybe we're missing something. How much of these billions in losses are not Bing? I mean most of it is surely Bing but Azure and Win 365 are probably substantial investments.
> That means with double the revenue (i.e. nearly Google's market share)
You're assuming search revenue and market share are linearly related. The whole point of the Bing/Yahoo deal was that they are not - as market share increases, revenue increases superlinearly.
Re: Bing Becomes a Distraction for Microsoft
#24This is interesting: I know Apple is sitting on a lot of cash. A lot. I think it would be fascinating to see Apple purchase Bing and rebrand it. With search built into the iPhone and the future value of mobile search in mind, I think it would be near foolish for Apple to miss this opportunity. Otherwise, no matter how well the iPhone does, Google will still always have its hand in mobile advertising money. But what d…
Apple is a very focused company. They build nice gadgets and sell them for nice profit margins. Everything they do is directed toward that goal.
Entering the search business means entering the online advertising business. They don't know anything about that business; just look at how iAds is working out.
Steve Jobs himself said directly at one of the All Things D conferences something like (paraphrase), "We don't want to do search. It's not a business we know anything about, other people do it well, there's no reason for us to get into it."
That's focus. It's something that's badly needed at Microsoft.
Re: Bing Becomes a Distraction for Microsoft
#25Earlier quoted context omitted.
If Microsoft can't bring it traffic... who can? Facebook. Even though IE is still in the lead (for now), everyone "googles" and "facebooks" their way through the internet. No one "microsofts" anything.
There are quite a few people who aren't so tech-savvy that unknowingly use Bing because it's the default in IE. I'm guessing they're the majority of that 27%.
They're also probably the ones that type "google" into the Bing search bar to get to Google. :)
Re: Bing Becomes a Distraction for Microsoft
#26This is interesting: I know Apple is sitting on a lot of cash. A lot. I think it would be fascinating to see Apple purchase Bing and rebrand it. With search built into the iPhone and the future value of mobile search in mind, I think it would be near foolish for Apple to miss this opportunity. Otherwise, no matter how well the iPhone does, Google will still always have its hand in mobile advertising money. But what d…
Apple is a very focused company. They build nice gadgets and sell them for nice profit margins. Everything they do is directed toward that goal. Entering the search business means entering the online advertising business. They don't know anything about that business; just look at how iAds is working out. Steve Jobs himself said directly at one of the All Things D conferences something like (paraphrase), "We don't wan…
Those are great points.
Re: Bing Becomes a Distraction for Microsoft
#27"But [Bing] has more value to a buyer that could bring it traffic." If Microsoft can't bring it traffic... who can ? Whatever other company you cite, can its putative advantage compete with owning the default browser? (Wikipedia still has IE in the lead [1], though an ever-thinner one.) Even mighty Facebook can't really compete with that sort of advantage. Honest question, interested in the answers. [1]: http://en.wi…
A start-up?
I think Bing's problem from the start has been that it has been in a "Goliath versus Goliath" fight. No one is rooting for an old monopoly to beat a new, cooler monopoly. But an independent Bing, one which was agile enough to create its own fun, quirky and smart user experience, might get a lot interest.
Re: Bing Becomes a Distraction for Microsoft
#28Bing isn't different enough to gain mindshare, and it's search results can't compete with Google (or even Blekko's IMO).
You know what would be disruptive? A search engine for physical spaces. When I'm scouring my apartment for a matching sock or my keys, I'd do a search and the missing item would be located.
I don't know how, but someone should do this.
EDIT: No, I'm not high. Just weird.
Re: Bing Becomes a Distraction for Microsoft
#29I think it's smart to take a short-term loss if they can grow their Windows Phone franchise. It is the default search engine on those phones and is tightly integrated into the OS. If the forecasts end up being correct (who knows?) then that will be quite a large part of the world searching through Bing and could drive long-term profitability.
Re: Bing Becomes a Distraction for Microsoft
#30"But [Bing] has more value to a buyer that could bring it traffic." If Microsoft can't bring it traffic... who can ? Whatever other company you cite, can its putative advantage compete with owning the default browser? (Wikipedia still has IE in the lead [1], though an ever-thinner one.) Even mighty Facebook can't really compete with that sort of advantage. Honest question, interested in the answers. [1]: http://en.wi…
It would be additive -- I'm sure any sale would include a multiyear agreement for Microsoft to leave it as the default search engine in IE. Otherwise what value Bing has today would largely evaporate.
That isn't to say that the article isn't complete crap. Bing was developed as a strategic asset. MSFT certainly isn't hurting for cash flow. They have no compelling motivation to part with it any time soon.