Bing Loses More Money As Microsoft Chases Google 317
angry tapir writes "Microsoft posted strong results for the third quarter of its 2010 fiscal year, largely thanks to sales of Windows 7. But the company continues to suffer heavy losses in its Online Services Division [warning: obnoxious interstitial] as it tries to match Google in the online search and advertising market. ... The division's quarterly loss grew by 73 percent to $713 million, compared to a loss of $411 million during the same period last year."
Clash of titans, watch the fallout (Score:5, Interesting)
I think it's important to consider the unbelievable forces involved -- nearly limitless funds on both sides. How many companies would like to take in the amount Microsoft casually loses? How much did they lose on Xbox in the beginning? When the rich guys go at it and it feels good that the rest of us pick a winner, what about the other companies that should have been contenders but couldn't buy admission? What Microsoft decides it wants, it tends to get. One of the government attorneys involved in the antitrust suit commented that they had legal resources that rivaled the Department of Justice.
The Google/Facebook conflict is another one to watch. I don't think Google has abandoned Buzz by any means, and Facebook is really pissing off a lot of people these days.
In all cases, don't linger on the losses they're having. They can afford it.
I'm not surprised Bing are losing (Score:5, Interesting)
Oft-times I'll know exactly what I'm looking for, or even the exact site I want to go to, and going via google is often faster than remembering/typing a URL. I know my search result will be top, as I know what to search for. This is far more hit and miss with Bing.
This does change over time, however. It used to be the case that if I wanted a review on a new pair of speakers or a motherboard or whatnot, I could google the product with the word review in the search, such as "b&w 683 review". Whilst for that particular search you'll find some good reviews do pop up first, for a lot of products its an ordeal trying to find decent reviews. Often it'll be a sales page where you can drop your own review, and more often that not they're blank. Its becoming more and more difficult to search for professional reviews, so for many products I go direct to specialist review sites, such as tomshardware for computer stuff.
I seem to have run a little off topic, but my point is that all of this is far more difficult to accomplish with Bing than it is with google, so I'm not surprised they're losing money - they've entered a marketplace with an inferior product (at least for the casual home user), and that's rarely a profitable move.
Re:Bing was a stupid idea (Score:1, Interesting)
Re:Competing Isn't Cheap (Score:5, Interesting)
Re:Bing was a stupid idea (Score:5, Interesting)
Actually Bing has some features that outclass Google Search. Image search is so much better on Bing because it's dynamically loaded so you don't have to page through 20 times to get a full view of what's out there.
It would be nice if Bing, Yahoo, or whoever grabbed 30-50% of the search market. Microsoft scares me, but so does Google.
Problems... (Score:3, Interesting)
Google isn't getting any worse and Bing just isn't innovating in any meaningful way. Trying to promote Bing is like promoting alternate keyboard layouts, even if it -is- better, any benefits will be lost in the fact that people have to re-learn something. Google isn't just a search engine, its a bookmarking engine. Its a lot easier to remember "nexus one review" than http://www.engadget.com/2010/01/04/nexus-one-review/ [engadget.com]
Re:Clash of titans, watch the fallout (Score:3, Interesting)
Self-destructive behavior of corporations (Score:5, Interesting)
For some reason, corporations seem to feel the need to compete in areas where they're clearly outmatched no matter what. So we'll see Google, Microsoft, Apple and whoever else steps up to the plate slug it out for a chance to lose millions chasing a train that left the station years ago.
Bing is a prime example of this kind of dysfunctional behavior. Microsoft has even gone to the extreme of paying people to use Bing and they're still not going to make it. In the world of web search, Google has years of experience doing it and they're getting better every day. Microsoft can't catch up no matter how much money they throw at it - in the final analysis, the general public reaches for Google when they want to search. I suppose Bing can slug it out with Alta Vista and Yahoo! for the "also ran" prize. If Microsoft would put all this money and effort into improving the things they're strong in - but no, we'll suffer along with bug-ridden Windows and Office while Microsoft chases the Google butterfly.
Google is doing it too - diverting resources from their core competency to compete in operating systems. Android looks like it has a chance because the competition phoned in their submission (Windows CE, WTF?), but the Chrome OS will be fighting an uphill battle all the way. It's good, but not as good as Sugar and that's a non-starter. They can park the wreck of Chrome OS next to the burned out husks of BeOS, Next, AmigaOS, and others in the scrapheap of history. That doesn't mean they won't "sell" a bunch of copies - but taking Microsoft on in the OS space is every bit as insane as Microsoft taking Google on in the search space and in the end it'll all count for nothing.
Right now, Apple has arguably the best cell phone OS in existence. It's much more polished than Android and - Windows CE doesn't count. Windows Mobile 7 is vaporware and while the demos look great the reality when they finally ship copies is almost certain to follow their past performances and be a giant disappointment. Apple doesn't have a free ride in this mess either - they're caught up in that "We sold a lot of units so we must be something special" nonsense. They're going to have to stop thinking they're superior and get busy; iPhone was very nice, but the competition is working on their game and despite their constant attempts to fail one of them is going to get it right one of these days.
The next few years should be very interesting. From here, it looks like Google will continue to own web search (and advertising) and Microsoft will continue to own operating systems and "office" applications. Apple, despite their desperately dysfunctional leadership will be worth more than either one (if not both) of them - only because they avoided throwing money away trying to bury Google or Microsoft. But they're not immune from the need to destroy themselves - watch the news and see what kind of lunacy they take part in as their superiority complex becomes blatantly obvious.
Re:Competing Isn't Cheap (Score:3, Interesting)
What surprises me most is this.
Time and again MS is trying to enter a market, only to sustain huge losses in the beginning. Now Bing, before the Zune (ended in failure), the Xbox (lost a lot of money, still alive though, can't imagine it has made them any money overall even if it would be profitable by now), and before I'm sure they lost heaps of money entering the office suite market with OpenOffice, the webmail market with Hotmail, and so on. Only their OS business has made a constant profit it seems. And Office is doing well as well. But that's it.
On the other hand I have never heard about serious losses on Apple's side around the introduction of the iPod. Sure they lost money on some products, but not this kind of numbers.
Google came out of nothing: they started up in a dorm room, came with a good product, and won the hearts and minds of the world and grew from there to become the behemoth they are now.
Sun has likely lost money on development of StarOffice, now OpenOffice.org, but their product is steadily making inroads and I don't think they are still pumping much money in it. If only because they're not such a rich company any more.
Netscape burnt and died, and from its ashes Firefox has risen. Making heaps of money, going strong, doing well.
Now for the examples above you may give counter examples of failures but it seems MS is the king. They have so much money, they can buy their way into any market they like (and they do), but they can not come up with anything innovative, anything desirable.
"Competing on the world stage" may not be cheap, but I think it may help if Microsoft starts to develop their own products and their own ideas, instead of an "iPod killer", a "Google competitor", etc. That seems to me a failure from the start. You have to have your own product that stands on its own, and is not targeting a specific existing product. "Netscape killer" Internet Explorer won due to lock-in and abuse of monopoly, not for being better than Netscape. Microsoft for some reason doesn't manage to compete on quality and on merit, they just try to solve those issues by throwing a lot of money at it. And that's a waste in more ways than one. We need innovation - no matter where it comes from, but MS is not exactly a company that is innovative these days.
Re:Because... (Score:5, Interesting)
Oddly, one feature Bing beats Google on is that its API [bing.com] has a much more generous license, allowing you to use results in non-user-facing apps like scripts; to reorder or filter results or mix them with results from other sources; etc. Google's API only allows you to [google.com] republish its results, unchanged, within a user-facing app, basically nothing much more complicated than including a "Google results for this term" sidebar.
Re:Competing Isn't Cheap (Score:3, Interesting)
It's not about competing. They're trying to buy marketshare. If they spent $713M into making a good product (and they know how to do it) by being honest for once, they'd be in the black.
not just online services (Score:5, Interesting)
Re:Self-destructive behavior of corporations (Score:3, Interesting)
For some reason, corporations seem to feel the need to compete in areas where they're clearly outmatched no matter what.
That's the way the global economy works. If you aren't growing, then you are dying. However much you have today, it's not enough... you must have more.
Re:Competing Isn't Cheap (Score:4, Interesting)
Re:How do I get to Bing? (Score:1, Interesting)
And if you think that's convenient, you really need to check out the Vimperator [vimperator.org] firefox plugin.
Re:Competing Isn't Cheap (Score:1, Interesting)
Skydrive is useful if you have a lot of small-medium size files, but I personally find the free version of Google Docs better, even with the 1GB limitation, as there is no size limit on files uploaded.
Google Sites (for free Apps Standard Edition) is more similar to Skydrive: 10GB space/10MB files.
The Xbox Fiasco (Score:0, Interesting)
You can't possibly be this stupid.
Last gen Microsoft lost some 4 billion dollars on the Xbox fiasco. This gen Microsoft has lost about the same amount. Although they are doing a somewhat better job this gen hiding the losses in Entertainment and Devices' other profitable products.
Last gen the Xbox got destroyed by Sony and Nintendo in Japan and Europe. This gen the Xbox 360 is getting destroyed by Sony and Nintendo in Japan and Europe. Last gen the Xbox survived off US and UK sales. This gen the Xbox 360 is surviving off US and UK sales once again.
Even more mind boggling is the 66 percent failure rate leading to millions and millions of duplicate Xbox 360s being sold still hasn't help Microsoft do any better this gen than last gen's fiasco.
But you do have to hand it to the idiots running Microsoft's online services. They are taking the crown from the 8 billion dollar Xbox train wreck for Microsoft's biggest financial turd.
Re:Bing was a stupid idea (Score:1, Interesting)
I like how Google has 10 times more hits for "Bing" than Bing does.
Re:Competing Isn't Cheap (Score:4, Interesting)
Re:Competing Isn't Cheap (Score:4, Interesting)
One large problem is the bright folks at Microsoft can't innovate on anything that could possibly lead to a loss of revenue of Windows products.
Of course. That is an issue. Though it seems they do invest a lot now in on-line services, including real improvements to IE's standards compliance.
On the user interface field they are being taken over on all sides by Apple and even Linux. There is so much innovation done there - MS doesn't have a proper touch interface to compete with the iPhone/iPad OS, for example. Of course MS has their legacy - there is no reason not to keep the old interface and allow the option of a new experimental one. Maybe even a few experimental interfaces. Let the power users find them and try them out - and listen to what the market thinks about it.
I strongly believe that it is not the underlying hardware that counts any more (yesteryear's is more than good enough for 99% of us - save hardcore gamers and hardcore CAD developers and so). It is not much the OS that counts any more (it just has to work, stable and secure - who cares what's under the hood), it is just the user interface. And there is no reason why MS can not do anything good there.
Computing is moving on-line: the browser is getting important. MS seems to understand this.
Computing is also moving more towards hand held devices. Like the iPad. MS is missing out on this.
Desktop computing as we had it will remain - the basic office work and gaming and web browsing on the "big" screen. MS is strong there now, but with the experiments going on in their competitor's products it is only a matter of time before someone finds the holy grail of desktop user interfaces and the competition really takes off. The Windows technical lock-in (mainly MS Word) is slowly dissolving already.
Way off, there (Score:3, Interesting)
Google has declared over $30 billion [yahoo.com] in tangible assets for 2009.
They even paid more than your $1.5 billion estimate in income taxes in 2009. [yahoo.com]
Frankly, I even think that Google has enough money to develop a competing OS and eventually displace Microsoft from their position of control in the OS market, but I don't think that they're at all interested.
Re:They should stick to what they're best at (Score:3, Interesting)
The ones with massive failure rates that cost Microsoft boatloads of money?
They are quite popular, but they still aren't making money for Microsoft. If you're still losing money two generations into the console business, you're doing something wrong.
I think the company that will eventually kick Microsoft's butt in this arena is neither Nintendo (different niche really) nor Sony. Apple tried a gaming console once and failed miserably, but it was basically a computer platform with no developers.
The iPhone/iPad Touch/iPad is already quickly threatening Nintendo in the handheld department with casual games. But imagine if Apple used the same App Store for a gaming console?
The controller would be a touch surface with accelerometers. Existing games in the App Store would all immediately work. They already have the massive library of games, but the "console" would provide more gaming power and a constant internet connection to enable Halo-killers and the like alongside casual games.
Nintendo, Sony and Microsoft would all quake in their boots.