Marie's blog: Microsoft Selling Bing Is a Non-Starter

Sunday, September 4, 2011

Microsoft Selling Bing Is a Non-Starter

Should Microsoft sell off Bing?

Hahaha. No.

Reuters columnist Robert Cyran wrote a July 22 opinion piece suggesting that Microsoft chucking its search engine will boost the stock price and save its online division some cash. "The industry's distant number two is a distraction for the software giant," he wrote, "one that costs shareholders dearly." He even calls out Facebook and Apple as potential candidates for snatching up Bing. Ha. Hahahaha.

As Mary-Jo Foley pointed out on her blog earlier today, there's one little problem with Microsoft ridding itself of Bing: By this point, the search engine is so deeply integrated into Redmond's "all in" cloud strategy that selling the unit would be tantamount to chopping off a limb. As explained (repeatedly) by Microsoft CEO Steve Ballmer and other executives, Bing's data is heavily leveraged in service of other cloud offerings, and the engine itself is being hard-baked into Windows Phone and other products.

Sure, Microsoft's online initiatives are losing a lot of cash. Guess what? Microsoft is sitting on a veritable Mount Everest of greenbacks. That situation won't last forever (in fact, given the recent weakness in Windows and Windows Live Division revenue, it might end sooner or later), but for the moment, Microsoft can certainly afford to set however much money on fire in order to establish and maintain an online presence.

Indeed, an online presence is perhaps Microsoft's most important goal at the moment. Traditional desktop-based software is transitioning, surely and not-so-slowly, to a cloud-based paradigm. Bing can serve as a sort of cross-platform "glue" between these growing cloud products. Give it up, and you rob pundits of the ability to argue over whether Microsoft is a dinosaur--because it will be a dinosaur, finally and irrevocably.

I'm sure investors (not to mention Microsoft's accounting department) are irate at Microsoft's online division burning through so much cash, but there's really no alternative. If it's any consolation to Microsoft, few people thought that Bing would survive as long as it has, much less (in conjunction with powering Yahoo's search) seize nearly a third of the market.