What Microsoft gets for $2 billion • Hacker News Board

Re: What Microsoft gets for $2 billion

#41

Post by arethuza » Tue, Dec 28, 2010, 10:04 AM UTC

rorrr wrote: post #39

apedley wrote: post #31

This is such small thinking. As one of the commenters on the page did: http://i.imgur.com/jHLOX.png It shows a much more likely scenario. Although maybe a bit over the top with the naming of the profit section as Google Kill Zone. Why can't big companies play nice. :)

No way in the world. MS has nothing to counter Google's search. Users will not switch to Bing, there's no reason to.

I switched to using Bing Maps about 70% of the time fairly recently - largely because here in the UK they have full Ordnance Survey 1:25000 coverage.

Re: What Microsoft gets for $2 billion

#42

Post by dotcoma » Tue, Dec 28, 2010, 10:19 AM UTC

grandalf wrote: post #24

To make the claim that this is a bad thing, one must argue that Microsoft's stock would be worth more today if Microsoft had not been aggressive about search. How a company shows gains and losses is also very subjective. The numbers could turn around and show strong profits around the time that bing reaches 45% market share (which will be soon).

45%? Not even in Ballmer's wet dreams.

Bing's market share is only up 4% since launch http://www.microsoft.com/investor/EarningsAndFinancials/Earn...

and most of those gains must have come at the expense of Yahoo!

Re: What Microsoft gets for $2 billion

#43

Post by apedley » Tue, Dec 28, 2010, 10:40 AM UTC

goalieca wrote: post #36

apedley wrote: post #31

This is such small thinking. As one of the commenters on the page did: http://i.imgur.com/jHLOX.png It shows a much more likely scenario. Although maybe a bit over the top with the naming of the profit section as Google Kill Zone. Why can't big companies play nice. :)

do you project a turnaround right now? Looking at their current product base I would say "hell no!". Microsoft has nothing up and coming to convince me they will gain more search users. Each and every time they have unveiled a new search or online tool they have failed to capture the market. I do not see what will be different in the future once they come up with their next big idea. Bing is clearly not going to take…

So what about the recent Facebook integration, still rolling out and the overall switch to social search, something Google can't get right no matter how many companies they buy.

What about the only very recent Yahoo integration, the Windows Phone integration and the constant improvement with maps beyond what Google have offered.

Re: What Microsoft gets for $2 billion

#44

Post by apedley » Tue, Dec 28, 2010, 10:41 AM UTC

rorrr wrote: post #39

apedley wrote: post #31

This is such small thinking. As one of the commenters on the page did: http://i.imgur.com/jHLOX.png It shows a much more likely scenario. Although maybe a bit over the top with the naming of the profit section as Google Kill Zone. Why can't big companies play nice. :)

No way in the world. MS has nothing to counter Google's search. Users will not switch to Bing, there's no reason to.

read my reply above ;)

Re: What Microsoft gets for $2 billion

#45

Post by dotcoma » Tue, Dec 28, 2010, 10:55 AM UTC

anonsoftie wrote: post #21

This is a challenging problem that doesn't fit nicely into comments or short blog posts, but I'll try. Search is a tremendously expensive game to try and win. It's economics are such that the more search share you have, the more money you earn per search. This is a critical point, so I'll spell it out a little further. All search companies have more advertiser dollars than they have searches to spend them on, Google,…

So, they lose 4 cents every time a search is performed (2 B USD in loss, 4 B searches per month, or 50 B per year) but they will make up on the volume? Not to mention: they still use Overture to monetize search...

Re: What Microsoft gets for $2 billion

#46

Post by dfhjtyjty » Tue, Dec 28, 2010, 11:02 AM UTC

anonsoftie wrote: post #21

This is a challenging problem that doesn't fit nicely into comments or short blog posts, but I'll try. Search is a tremendously expensive game to try and win. It's economics are such that the more search share you have, the more money you earn per search. This is a critical point, so I'll spell it out a little further. All search companies have more advertiser dollars than they have searches to spend them on, Google,…

-----( http://ta.gg/4wt )------

Re: What Microsoft gets for $2 billion

#47

Post by rbanffy » Tue, Dec 28, 2010, 11:20 AM UTC

goalieca wrote: post #36

apedley wrote: post #31

This is such small thinking. As one of the commenters on the page did: http://i.imgur.com/jHLOX.png It shows a much more likely scenario. Although maybe a bit over the top with the naming of the profit section as Google Kill Zone. Why can't big companies play nice. :)

do you project a turnaround right now? Looking at their current product base I would say "hell no!". Microsoft has nothing up and coming to convince me they will gain more search users. Each and every time they have unveiled a new search or online tool they have failed to capture the market. I do not see what will be different in the future once they come up with their next big idea. Bing is clearly not going to take…

> do you project a turnaround right now?

Fans are true believers. They will bend reality if needed.

Re: What Microsoft gets for $2 billion

#48

Post by disruptivetech » Tue, Dec 28, 2010, 11:22 AM UTC

Many see online as a "loss-leader", consider it setting out your stall. MS makes plenty of cash from selling product, but you could argue without the online presence their sales would be diminished - so where they are on the balance is what really needs to be considered i.e. if they shut up shop online, what the cost to the OS/Office division would be now and in the future?

There is always the hope to tough it out in the hop of eventually gaining more market share as your competitors run out of steam and cash.

Re: What Microsoft gets for $2 billion

#49

Post by rbanffy » Tue, Dec 28, 2010, 11:42 AM UTC

brudgers wrote: post #17

The chart doesn't account for the operational value of Bing for Microsoft. If you want to search MSDN, Google doesn't get to sell advertising or skew the search results to fit their business model or for that matter track what you're searching. Likewise, searches from MicroSoft IP addresses using Bing aren't tracked by Google either.

On the rare occasion I have to look something up on MSDN, I use the search box on Firefox and that uses Google. I gave up on MSDN's (and Microsoft site) search a long time ago in favor of Google's because they seem to be better at finding relevant contents on Microsoft properties.

Re: What Microsoft gets for $2 billion

#50

Post by rlmw » Tue, Dec 28, 2010, 12:38 PM UTC

yurylifshits wrote: post #33

anonsoftie wrote: post #21

This is a challenging problem that doesn't fit nicely into comments or short blog posts, but I'll try. Search is a tremendously expensive game to try and win. It's economics are such that the more search share you have, the more money you earn per search. This is a critical point, so I'll spell it out a little further. All search companies have more advertiser dollars than they have searches to spend them on, Google,…

Your analysis is very good. I just want to add that dynamics of "more searches -> more revenue per search" also holds for every individual niche. In order to make good money, one can build substantial market share either in certain geographies (e.g. Indonesia, India, China, Russia...) or verticals (shoppings, deals, travel, cars...).

Are Microsoft actually seeking to obtain market dominance in a particular vertical or region? I'd have thought this would go against their grain. I haven't seen any particular evidence of this, but I'd be interested to know if I've missed something.

Also dominance in verticals/regions won't necessarily net them the £10bn/year that they'd like - of course it might be a good stepping stone to broader dominance.