Microsoft Committed to Bing

January 14, 2014

ZDNet takes us inside a recent investor call with Microsoft’s CFO Dave O’Hara about his company’s online services strategy in, “Microsoft: Bing is Not a Bottomless Money Pit (Any More).” For about six years, the company has poured money into building the infrastructure behind Bing‘s datacenter. Now the foundation has been laid, and Microsoft is poised to start seeing its investment pay off.

Reporter Mary Jo Foley explains:

“In keeping with Microsoft management’s claims that Bing isn’t an asset it would make sense to sell at this point, O’Hara stressed that Bing is no longer ‘just’ a Web search engine and that Microsoft has integrated it into an increasing number of its products, such as Windows and Xbox. He said Bing also has given Microsoft a leg up in creating ‘one of the best data sets in the industry,’ which Microsoft will leverage increasingly in future products and services.

Though O’Hara didn’t cite any of these products specifically, a couple of examples of areas where Microsoft’s big-data prowess will come into play are offerings like its cloud-based business intelligence service bundle, Power BI, and the coming ‘Cortana’ personal assistant technology expected to debut first in Windows Phone 8.1 next year.”

Foley is wary of drawing any conclusion about Bing’s profitability, now or in the future, because changes in the way Microsoft reports revenue obscure the value of any particular online product. She notes that, as a whole, the online services division lost $321 million on revenues of $872 million in the most recent quarter. Still, she seems to accept O’Hara’s point: After all that investment, now is the time to go forward with Bing rather than heed calls to sell it off. We shall see whether the strategy pays off down the road.

Cynthia Murrell, January 14, 2014

Sponsored by ArnoldIT.com, developer of Augmentext

Comments

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