Googling It on Bing

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.

Bing it
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.


 

Source: BingItOn.com

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.

Fool contributor Evan Niu sometimes wishes he was a grammarian. He owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Apple, Microsoft, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, Amazon.com, and Google. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (4) | Recommend This Article (3)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 14, 2012, at 2:32 AM, sharpx2 wrote:

    The alternative to trying to make Bing succeed and turn a profit would be to give up and concede the market to Google. The nice thing about Microsoft is that they do have a way of eventually turning things around in their various divisions, even if it takes painfully long and requires bags and bags of cash.

    Also, just giving up is not really a choice. At least, not yet. The longer they keep Bing alive, the more chance they have of stumbling upon the correct strategy to start moving it forward. And as long as it does not drag the overall performance of the company into the red, they can afford it.

  • Report this Comment On September 14, 2012, at 8:00 AM, RandomMeaning wrote:

    "The alternative to trying to make Bing succeed and turn a profit would be to give up and concede the market to Google."

    There are other search engines you know. Yahoo was doing fairly well but not great. Then they partnered with Microsoft. Pretty soon about half of their search results transferred to Bing. So what was the result? Microsoft actually weakened Google's biggest competitor and Google continued to gain market share. Microsoft is no hero hear.

    "The nice thing about Microsoft is that they do have a way of eventually turning things around in their various divisions, even if it takes painfully long and requires bags and bags of cash."

    That sounds nice but in reality Microsoft does frequently abandon projects: Plays for Sure, Zune, Kin, Longhorn (which became Vista without all of the lofty goals they had announced years previously), etcetera. Which is fine. Smart companies know when to drop it and move one (although individual cases can be debated).

    "Also, just giving up is not really a choice."

    Why not? I'd bet that most, if not all, of the people using Bing would revert back to Yahoo and/or other search engines.

    Go back to when Microsoft first jumped into search. Part of developing an in house search engine was to get a piece of all the lovely money Google was making. But the other part is that Balmer is essentially a salesman, a deal maker. And search advertising is about cutting deals which Balmer believes he excels at. He loves making deals with other companies with the weight of Microsoft behind him.

    I think his track record shows he's not quite as good at it as he thinks.

  • Report this Comment On September 14, 2012, at 6:47 PM, ironyworks wrote:

    I tried MS's "Bing it on"challenge, disliking the invasiveness of Goog...and it did miserably in my specialized areas of interest, myself and my business.

    I'd happily use a search engine that didn't track my each and every brain-fart.

    Bet there's a whole fat user niche of folks who valued their privacy, just waiting.

  • Report this Comment On September 15, 2012, at 10:55 AM, Edeskimo wrote:

    Well, where's the money going to come from to build such a search engine to beat Google without advertising and ideally advertising best suited to the individual doing that search? You could directly charge people but most would just prefer to use Google instead and get a better service.

    Charlie Munger's opinion was that Google had the deepest moat he had ever seen because of how far ahead it was in search and because they got stronger with each search .

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