Microsoft has lost $9 billion on Bing
money.cnn.com
money.cnn.com
For that to work people would have to change the way they think about microsoft as well, not how they think about search.
Right now there are several ecosystems on the web that you can be part of. There is the 'social' ecosystem which governs you interactions with other people rather than with other services. Facebook, twitter, google+ etc. Then there is 'mobile', which is a gateway to a bunch of data and to information. Then there is your work and the applications you use to do that work. Finally there is search.
Search is different from all the others in that you could switch overnight to a new provider, but just like any other good infrastructure component, you probably will not do that if you are satisfied with your current provider. Search is not visible enough to warrant a conscious decision until you are dissatisfied.
Changing your thinking on search is one hurdle that is going to be hard to cross without say google going down for a couple of weeks or some major mishap that would make their search results unusable for any period of time. That would give an upstart a better chance at a first shot at retaining the users.
Changing the way you think about microsoft is going to be a very hard obstacle to clear as well. Microsoft is synonymous with software that you use on your desktop and with several botched attempts at doing search. Before you try them again you'd have to see google performing worse than the best that microsoft has ever presented in this field.
Frankly I'm surprised that they keep sinking money into this, they've clearly failed to establish a profitable beach head, meanwhile google is making money hand over fist in the exact same domain. I'm happy they do, more competition is better but for now google seems to be acing them. Microsoft will have to be very careful that 'search' does not turn in to their Afghanistan.
I honestly don't really care that Bing is part of Microsoft - if they consistently started finding noticeably "better" search results than Google I'd stop using Google in exactly the same way that I stopped using AltaVista/HotBot/etc.
YMMV.
Many people remember how Microsoft operated in the past (and I suppose, in the present).
Now if someone would do to google what google did to altavista that would move the needle on many fronts.
I suspect DDG is not it, but I'm not saying it is not possible.
Everyone likes to say that...but really, how do you know? By definition, disruption comes when you don't expect it. When Google came along, people didn't know that search could be made better. Likewise, today, people don't see what they're not getting with Google...they just know that Google's results cause about the same level of satisfaction as they always have.
The search engine that gets a toehold against Google is going to do something completely different, and re-define the search game for all of the players. It's not going to be a head-to-head competition on the same playing field.
That's how Facebook happened.
In the mobile search space, pay attention to DoAT.com - it's mobile search done right, unlike google (or anyone else). If they gain enough traction, they can dethrone google eventually. Or it could just be a passing fad.
It's rare to win an established game, like Google did with search (or Microsoft did 20 years ago with word processing and spreadsheets). It's much more common to win at a new game that is being overlooked by the giants. (Some people say the Microsoft takeover of the office space is "a different game" because no one took "office suites" seriously except them; However, Word really was better than WordPerfect and friends at the time; and Excel really was better than 1-2-3, and people were switching one-package-at-a-time. So I think this should be considered winning an established game)
The user experience changed from "tell us what you want, and we'll go out and see what we can find" to "we have everything right here, just let us know what you are looking for."
(I don't use Bing and have no conceivable stake in this fight.)
That said, http://mashable.com/2009/06/07/blindsearch/ (apparently based on http://delicategeniusblog.com/?p=839) suggests that in a blind three-way test in 2009 both Yahoo's and Bing's results got picked as the best regularly (Google gets 41%, which is a substantial but not overwhelming advantage.) Note that that guy works for Microsoft, too.
I feel like Bing would have better success breaking out into new spaces to push its search engine.
This seems to be Microsoft's MO, and it seems to have worked with the XBox. Push hard, buy a second place position with massive marketing, investment, and underpricing, and continue to maintain it while losing billions and billions. Then the first place company inevitably, eventually makes a series of horrible, very public missteps, and Microsoft is positioned as "The Alternative."
On one hand, I think it's a pretty sleazy tactic, but on the other hand I rarely ever see any corporation thinking in the long term, especially to this absurd degree. I'm not exactly sure what the strategy is to defend against this, either.
It's kind of "all in" move by Google. If Google+ succeeds, their brand will be even stronger, and as king of data, search and social they will stay leaders for the long time, giving them possibility to attack other market segments too.
But if Google+ fails, Google brand will be severely damaged, and normals could go somewhere else.
All Microsoft has to do here is to wait for the outcome and actively try to sabotage Google+ efforts by working together with Facebook.
/sarcasm
They had the foresight to include a NIC (Network Interface Card) in the XBOX, right out of the gate. It was also the first game console to include a hard disk.
The PS2 did not initially include a NIC, and Sony offered the add-on PlayStation Network Adapter in order to compete with Microsoft. In addition, Microsoft launched XBOX Live approximately four years ahead of Playstation Network.
Regarding missteps, Microsoft has experienced their share of technical hurdles [1].
Regarding financial losses, Sony has experienced the same [2].
[1] http://en.wikipedia.org/wiki/Xbox_360_technical_problems
[2] http://www.engadget.com/2009/08/25/sony-still-losing-money-o...
I do not know the answer to your question, but I would venture to say that the target audience would have known either way. The adult game cognoscenti are obviously dialed into magazines, blogs, etc. Kids are of course in the know as well, and in cases where they do not have purchasing power, they will undoubtedly provide the necessary counsel to those above them that do :)
That might've played a big part in it's success. Or at least a big part in giving it a fair shot.
My opinion is that the XBOX's success was largely due to the quintessential launch title, Halo: Combat Evolved. This is one of the driving factors behind the XBOX's sell-out launch in North America.
Meanwhile, the Halo torch has been passed to Microsoft's 343 Industries, with their sights set on developing Halo 4.
Yes, good point. The modem was an industry-first in a game console, and definitely forward-thinking on Sega's part.
Unfortunately, Sega was forced to cease production of the pioneering Dreamcast in 2001. At that time, the company refocused their resources on game development. This was sometime after the PS2 launched in North America, and sometime before the XBOX launched in the same territory.
On a related note, I remember playing Jet Grind Radio for the first time. The cel-shading was really cutting-edge!
Beat Microsoft at their own game. Initially, people moved to MS-DOS because it was the cheaper computing environment. The first place company in the console wars currently is Nintendo Wii, and lo and behold it is cheaper than the rest.
Pretty damn good + cheap = winner
Nintendo is 1/2 the powerhouse with a 1/3 of the AAA titles, yet dwarfs MS and Sony in console sales (and, with DS portable, completely blows them out of the water).
Another example: Compare how utterly lost iPad competitors are in the tablet space. One had to completely exit the market and slash prices to below cost to even make a dent.
Yet, there is one tablet quietly garnering sales in the millions and is single-handedly keeping a billion dollar company afloat: The Barnes and Noble Nook Color. They're selling these Android tablets like hotcakes. It's well crafted and sturdy, and at a price point ($250) that makes it a compelling purchase. It's making B&N a fortune.
This is insightful. While some of us geeks have a grudge against Microsoft, most people don't. They probably do, however, have a mental separation between the desktop and the web.
Microsoft was slow to embrace the web because it threatens their core products. So the web grew without them. Now they're saying, "oh, we're on the web, too!" But when people think of the web, they don't think of Microsoft. They missed the chance to make that association. And it's hard to get it back.
I think most users couldn't describe the difference between these two if their life depended on it, FWIW. Ever met someone who referred to Excel as a web site?
This guy ( http://worldofsu.com/philipsu/?p=209 ) mentions that users prefer bing results over google results when the put a google logo above them (no source cited, tho). That's got to be maddening... But yeah, it's a brand problem as much as it's a product problem.
I still use Google though, so maybe it really is all about the logo for me...
Well, what else are they going to do? It's very clear that in the foreseeable technological future, search will continue to be an immensely important lynchpin of all sorts of services. Microsoft are in this because they realize that. You can't walk away from this table, however much you're losing.
Bing is definitely going to be bouyed by the Xbox, Windows Mobile and Windows 8 integration, so that's good.
FWIW, I like Bing, and I want them to do well. The results aren't as good as Google's yet, but their ancillary properties, like image search are pretty good. Video search is certainly better than Google's half-baked offering.
This thread is a great example of the problems Microsoft faces among HNers, but I don't think the general public has such a blatant bias against Microsoft.
For instance, this topic was submitted 9 hours ago, has 128 points and is on the front page. It also has a false title.The title asserts that "Microsoft has lost $9 billion on Bing". However, the CNN article doesn't have this title. The article says that Microsoft "has lost $5.5 billion on Bing since the search service launched in June 2009".
Now, HN moderators often heavy-handedly change submission titles on the grounds that the title violates some obscure HN rule (like for example, the rule that "X ways to optimize your app" is inappropriate)
In this case, we have a much more blatant rule violation - changing the original title of the story and substituting it with a false assertion. Yet, none of the moderators have changed the title of this story.
And the original comment you're referring to isn't stating a clear bias against Microsoft, per se. It's more that they're stating a general perception: that Microsoft is Windows and that it's mostly a desktop software provider. I think we can all agree that the general public agrees with that.
Don't worry - not all of us are out to get Microsoft.
The online services division has lost $9B since 2007.
"online services division" is not the same as "Bing". It is a division which (over the years) has included several different products/services. Bing (created in 2009) is one of those services. MSN used to be (and may still be) part of that division.
However you come across as claiming that Microsoft is being victimised by a conspiracy of unreasoning and unreasonable hatred by HNers and the mods. "Blatant bias"? Really?
I would suggest that people (not just HNers) know exactly what Microsoft is like and how badly they have behaved, if people are biased against Microsoft it is for a good reason. Microsoft have earned their reputation.
To me, it seems like if they think Google has just not delivered or dropped the ball or something regarding search, then Bing really fails to deliver. I have a hard time calling it better than Google and a really really hard time seeing it being better enough to switch. It just doesn't do that much more.
If they're doing search, then the clearly need to do it better right? Not simply as good. Is it just arroagance that they can deliver some that merely matches or approaches Google and expect to eventually win? What makes them think that? It doesn't appear to be supported by any facts.
There have been a few instances where what I was looking for was not found on Google and I gave up looking for it. Later (after a few months!) when by chance I tried the same query on Bing, the results showed up right on the first page. Surprised by this, I rechecked it on Google and it appears either on the 3rd or 4th page - something I would never check earlier.
Since then I started always doing a backup search on Bing for anything important, to see results I might have missed on Google. By now, I'm using them 50:50.
Also attended a lecture on Bing search, and learnt that their approach is a little different, which could acount for this observation.
That's an example of an annoying tendency that I see in many news sources. Why is a vague quote from an investment advisor relevant here? Who is Sid Parakh and what justifies his opinion? I see nothing related to search on his linkedin profile, at least.
This article is actually called "Microsoft's plan to stop Bing's $1 billion bleeding", and the loss on Bing alone is $5.5 billion since mid-2009. It was only Microsoft's total online services division losses that reached $9 billion, and that was since 2007.
Bing, MSN, MS Advertising, Global Foundation Service (the infrastructure)
Microsoft is a cash cow, and has multiple sources of strong revenue. Google has one: advertising. Microsoft can afford to bleed cash for years, just to give Google a black eye.
Microsoft only this past year got out from under government oversight for antitrust violations. I've spent quite a bit of time talking to people at Microsoft the past 2 years. A lot of the BizSpark team are ex-Sun people. And a number of them have mentioned to me how shocked they were at how profoundly the anti trust litigation still affected employees within the company 10 years later.
Windows 8 is the first OS since ME that comes out without government anti trust oversight, and it looks like Microsoft has come out swinging, both at Apple and Google. http://channel9.msdn.com/Events/BUILD/BUILD2011/KEY-0001
Google is just now starting to get into anti trust how water, and I have no idea how they are going to get out of it. I think Yelp in particular has a really strong case: http://www.pcworld.com/article/240330/google_faces_antitrust...
Microsoft can afford to bleed cash for years
OSD includes Bing, MSN, Live Mail and Messenger...aka support services they provide to their internal and external customers (e.g. Windows Phone 7 uses Live Mail). It doesn't include profit centers like Xbox Live or their various enterprise level cloud services.
OSD is primarily a cost center for marketing. Microsoft attributes half the value of its goodwill to OSD (US $6B).
[http://www.microsoft.com/investor/EarningsAndFinancials/Earn...]
In addition, it's revenues don't reflect any savings Microsoft realizes by advertising it's own products on it's own ad network or by promoting its own brands on MSN (e.g. stories from MSNBC).
Finally, the value of the data collected by the OSD is not directly reflected as revenue. That data provides Microsoft with insight regarding search, shopping, social networks, news interests, etc.
http://en.wikipedia.org/wiki/Microsoft#Windows_.26_Windows_L...
With Google, you never know if a product has a team behind it or it was someone's side project that got out of hand and received too much press that they'll kill a couple in a couple months because it didn't get enough traction.
Now sure, in the startup world the idea of sticking with an idea and plotting along losing money is a terrible sign, but on a personal level I can't help admiring Microsoft's fierce tenacity.
Moreover, trying to guess the semantics of user's queries can be very annoying to some users, especially the geekier ones which are often also the trend setters in this area - there are lots of people already being pissed off by google when they search for synonyms of what you type, and not exactly what you type.
Competition is always good and I hope that Bing and Google will make search always better, but I'm not so sure how useful will be what was reported in this article.
The article raises the question of "how will Bing make money" and then drops the question, and goes on to talk about competing with Google. Lazy thinking by the writer.
For microsoft's part, it just seems like they're always one step behind google, which is one step behind Facebook, which sooner or later will be one step behind someone else when they've maxed their revenue from their current business and feel compelled to stray from their core competencies. History repeats itself and the young grow old.
Also, thought it was an interesting bit about bing gaining marketshare from yahoo (their partner) and not google. Ouch.
When you hear the word “startup”, you most likely think of an Internet startup. Maybe it’s funded, maybe not, but its burn rate almost for sure puts it in the red each quarter. Obviously, Microsoft is not a startup. Nor have they been a startup for a long time. But what if you thought of their Online Division as an Internet startup? One funded by Microsoft. The thought it terrifying. Or it should be. To Microsoft.
Microsoft released their Q1 2011 earnings today. The results were very good except for one very big blemish: the Online Division. Last quarter, the division lost $560 million for Microsoft. That’s better than the previous quarter when it lost a staggering $696 million, but it’s much worse than a year ago, when it lost $477 million. In the past year, Microsoft has lost well over $2 billion from the division.
As long as a guy like Steve Ballmer is running the company, I will stay far away. Perhaps when management changes down the road result in MS better demonstrating that they are more interested in producing great products rather than gaining market share at any cost, I'll take them seriously again. We're starting to see some of that with windows mobile and win8.
1. I hate the stupid pictures and the other stupid fluff.
2. It is called "Bing" (the only worse brand name is "Yaris"... what are they thinking?)
3. Microsoft doesn't help fund and staff a LOT of the Free software infrastructue I depend on.
I've always wondered about names...is Bing only a bad name because they haven't been successful? Is Google only a good name because they've been incredibly successful? I wonder how many people said the same thing about Google 12 years ago?
Bing can't win by offering "a better way to Google": http://www.youtube.com/watch?v=tYVCk10AzS0
Perhaps more significant is their number of AdSense affiliates. (After all, search doesn't make money, advertising does.) Blog after blog and developer and developer continue to embed Google ads, and are thus themselves bound to Google and encouraging others to do so.
I use DDG. :-)
Also find it interesting that they're gaining share, while the article states it's from other providers but Google, doesn't that still mean that these users are actually choosing Bing over Google? That they're chosen it because it's better?
Bing is not like a small but scrappy startup who can make a profit off their small market share because they are lean.