Thursday, September 22, 2011

BING COSTS MICROSOFT $5.5 BILLION


Microsoft has lost $5.5 billion, an average drain of $1 billion per quarter, on Bing since it introduced the search engine in 2009, CNNMoney reported on Wednesday. Despite the losses, Microsoft’s Bing reached a 30% share of the U.S. search engine market in April of this year, slowly narrowing the gap with Google, although comScore’s figures pin the search engine’s share at just 14.7%.

Despite the constant drain, Microsoft still has a plan for Bing. During the company’s financial analyst meeting in California recently, Microsoft’s president of online services Qi Lu said his company hopes to use Bing to “reorganize the web” to “change the game fundamentally” instead of taking on Google in a head-to-head dogfight.

“We are able to try things with much more flexibility,” Bing director Stefan Weitz said. “If we make a mistake, it’s not going to take down the company.” Analysts believe Microsoft will continue to lose money, however. “Bing will likely be better than Google over time, but even if it is, users and advertisers still need to go to them,” McAdams Wright Ragen analyst Sid Parakh told CNNMoney. “To be clear, this will take a long, long time to play out. This is something Microsoft will continue to lose money on.”

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