Bing to Be a Money Machine
February 4, 2010
A happy quack to the reader in the UK who sent me a link to “Microsoft’s Bing Will Make Money,” a story that appeared in the UK’s Independent newspaper. I thought that Bing.com was an expensive operation and the most recent version of a series of expensive Web search investments that Microsoft has been making for a decade. Whenever I hear about an online service “making money”, I think about the Original Lexis Syndrome; that is, as long as no one goes back to total the amount spent on an online property since its inception, total the actual revenues, and then figure in the interest on the money—it is easy to assert that an online service will “make money”. But accountants have become malleable computational beasts, much like one of my trusted boxer dogs. Enron trained its accountants to play dead and roll over. Do you think other online executives have similar training skill?
In my opinion, the notion of figuring out the actual cost and payoff or loss from an online property is not a particularly high priority. I used to argue about this with Don Wilson, one of the founders of the original Lexis service which Mead Paper bought a quarter century ago. He would remind me that “accounting rules are rules. Real money is different.” Sadly Don Wilson is no longer with us, but I would be quick to point out that making money online is tough. Don would agree that saying that one can make money online is a heck of a lot easier than actually do it and making a healthy, sustainable profit.
The most interesting passage in the write up in the Independent was in my opinion:
The world’s biggest software company has lost more than $5 billion (£3.1 billion) over the past four years trying to build an online business, but hopes to reverse that trend once it completes a search advertising partnership with Yahoo Inc. “As soon as we close and implement the Yahoo deal, we have achieved a milestone: for advertisers, we are a credible No. 2,” Yusuf Mehdi, senior vice president of Microsoft’s online audience business, said in an interview on Tuesday.
So what’s the interest on this and the total spent in Web search since 2002? When?
I keep thinking about the time and money calculations from some distant college class. Maybe today’s financial wizards don’t look at those numerical recipes? I do, but that’s an addled goose for you.
Stephen E Arnold, February 4, 2010
No one paid me to write about my college classes in 1962. I will report this to the Department of Education if I can get a human on the phone. Perhaps I should send a text like this: “No pay 4 stry.”
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
