How many times has Google (Nasdaq: GOOG ) been the official score settler in a heated debate between you and a friend? "No! You’re wrong! Google it!" You’ve surely said these words countless times by now. The search giant’s name is a bona fide verb nowadays, and has become synonymous with online search.
That’s something that Microsoft (Nasdaq: MSFT ) has always envied, and something the Redmond giant doesn’t take lightly, according to a recent report by Fast Company. Steve Ballmer has had high hopes in the past of turning "Bing" into a verb, hoping to displace "Google it!" in the aforementioned conversation with "Bing it!"
The company has even paid for product placement in TV shows before, having actors say "Bing it" to settle something. Sony’s (NYSE: SNE ) The Amazing Spider-Man, released this summer, also prominently featured Bing just about every time your friendly neighborhood wall crawler needed to look something up on the Web.
Bing exec Adam Sohn told Fast Company, "We don't have an explicit strategy to go chase the verbiness. We don't have that as a goal -- like we're not spending money [on it]. We've never tried to verb it." Bing’s new ad campaign may beg to differ, because it is titled "Bing It On." I may not be a grammarian (not even as a side gig), but I’m fairly certain "Bing" isn’t being used as a noun, pronoun, adjective, adverb, or preposition in that phrase.
According to the report, not even Microsoft employees say "Bing it" frequently. It happens, sometimes, but it’s "rare." With Google simply being synonymous with search nowadays, Sohn would ultimately be "happy if someone said 'Google it' but they were going to Bing and give us the query."
Microsoft is ramping up its efforts to challenge Google’s hegemony, even inking a deal with Amazon.com (Nasdaq: AMZN ) scoring Bing as the default search spot in its new lineup of Kindle Fires.
Considering Apple’s (Nasdaq: AAPL ) increasing hostility towards Google, and it’s active attempts to reduce Big G’s presence on iDevices wherever possible, such as developing an in-house mapping service using three separate acquisitions, or unbundling the YouTube iOS app as a first-party app, it’s conceivable that Microsoft could one day score a search partnership with its long-time rival. That would be a major score, considering how many devices Apple sells.
A deep red hole
The most relevant question for investors about Bing is whether or not the initiative will ever become a profitable endeavor. Bing was launched in June 2009, and its operating results are included in the software giant’s online services division, or OSD. Here’s how that segment’s operating income has looked ever since.
Source: SEC filings. Calendar quarters.
Of course, last quarter’s enormous loss was primarily the result of a $6.2 billion goodwill impairment related to the failed acquisition of aQuantive in 2007, which Mr. Softy had high hopes for, as it was building its budding online advertising business.
The OSD has generated operating losses of $13.8 billion since then. That’s more than the size of entire companies, yet Microsoft has blown it trying to compete with Google. That’s a mighty deep hole for Bing and the OSD to try to dig itself out of. But then, again, Microsoft has never been averse to throwing good money after bad.
It wasn’t until 2007 that the company’s entertainment and devices division, or EDD, was able to begin consistently generating black ink, and even that business is still cumulatively in the red over the past eight years, and the OSD’s red hole is far deeper.
Microsoft should have stuck with its core cash cows, and investors would be much better off. The good news is that those core segments remain as strong as ever. One of The Motley Fool’s top analysts has put together a comprehensive report on Microsoft. Grab your copy today and get free updates included.