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.”

SONY ESTIMATES PSN BREACH TO COST $171 MILLION; EXPECTING $3.2 BILLION LOSS FOR YEAR

It has not been a good year for Sony, which was affected both by the massive earthquake in March and the PSN outage that spanned from April into May. There couldn't be any doubt that those things would have a drastic impact on the company's bottom-line, and it's now taking the time to give investors an idea of just how big an impact that could be -- even though the financial issues lie largely elsewhere. Sony is set to announce its full financial report for its fiscal year this Thursday and, to soften the blow, estimates have been revised steeply downward. Previously Sony predicted a ¥70 billion ($855 million) profit, but now thinks a ¥260 billion ($3.14 billion) loss is rather more accurate -- a ¥360 billion non-cash charge taking the wind out of ¥200 billion in operating income.

The earthquake was directly blamed for a loss of ¥22 billion, but that figure could certainly grow as this estimate is only through the end of March. Additionally, Sony has provided a early guess of a ¥14 billion (about $172 million) total cost for the PSN breach. That's less than two bucks per exposed account, but again we wouldn't be surprised if it's a figure that increases through the year.

DELL, MSI AND GIGABYTE PULL PRODUCTS DUE TO SANDY BRIDGE CHIPSET FLAW

Due to Intel's flawed Sandy Bridge chipset, Intel has projected a $300 million hit to its bottom line, and another $700 million to cover repairs and replacements. Intel is now estimating a round $1 billion loss in "missed sales and higher costs." Those missed sales will be coming directly from guys like MSI and Gigabyte, two of the major motherboard makers, who have stopped selling their Sandy Bridge-compatible models until Intel delivers untainted stock, and also Dell, who has nixed availability of its Alienware M17x R.3 gaming laptop. CNET did spot that HP and Dell were still selling laptops with the offending chipset in them yesterday, but we imagine both will get their online stores straightened out in due course. For its part, HP says it's pushing back a business notebook announcement due to this news, much like NEC has had to do. [Engadget]

LG REPORTS Q4 LOSS

Korean manufacturing giant LG released its Q4 results and they were not good. The company posted a net loss of $230 billion compared to a profit of $325 billion for Q4 2009.

Overall shipments were down 10% to 30.6 million units, pushing LG into the No. 5 spot globally behind RIM. The company will look to new high-end smartphones like the Optimus 2X, Optimus Black and Optimus 3D as it attempts to reverse its declining mobile trend. LG remains the No. 2 TV company globally, as sales in its home entertainment division increased 15.8% compared to the third quarter of this year. Because competition forced LG to drop the average selling price on its television sets, however, the company’s home entertainment business still posted an operating loss in the quarter.

RUMOR: YAHOO TO LAY OFF 2,500

A rumor is making the rounds that managers at Yahoo! have been told to start deciding which staff need to go. The reason? Yahoo!’s upper management is set to cut 20% of its staff, or around 2,500 people.

Although not official yet, TechCrunch has been told this is happening from two independent sources. Yahoo! has used the common response of not commenting on rumor or speculation. If it’s going to happen it won’t be long before former Yahoo! staff start talking about it, though.

The rumor comes a few days after Google decided to give all its staff a 10% pay raise and $1,000 to spend over the holidays. Clearly they have been doing a lot better than Yahoo! for quite a while now.

We really hope this rumor isn’t true for the sake of the staff who will lose their jobs. But at the same time there’s a lot of talented people at the company who should have no problem finding alternative positions. Maybe they can use Yahoo! Hotjobs to find another employer. [Geek]

NINTENDO LOSES MONEY FOR FIRST TIME IN SEVEN YEARS

Due to poor sales of its flagship products, the DS and the Wii, Nintendo has post a loss for the first half of the year.  This is the first loss in over seven years for Nintendo.  The DS slid from 11.7 million units last year to 6.69 million this year.  This is to be expected since the DS has been around for almost six years and the 3DS will be launching soon.

What is unexpected is that Wii sales have fallen off as well.  Last year 5.75 million Wii's were sold compared to 4.97 million this year.  This could be explained by the increased interest of the Microsoft Kinect and Sony Move for the Xbox 360 and Playstation 3 respectively.

Also contributing to the loss is the big slip in the value of the Yen.  Combining all these factors mean Nintendo's net income was down 33.7% over the same time last year and operating income was down 48% for the same period. [Gizmodo] [Kotaku]