What a (financial) drag.
A CNNMoney report this week estimates that Microsoft's
The division, which also includes MSN and adCenter, has lost roughly $8.4 billion since then, with the losses accelerating. Over the past three years, OSD has generated operating losses of $1.6 billion, $2.3 billion, and $2.5 billion in 2009, 2010, and 2011, respectively. It didn't help that Bing used to give away free money.
Is Mr. Softy at least gaining market share? That depends on what you consider Bing's true market share. comScore
Source: comScore press releases.
A couple of things stand out to me. First, people still actually use AOL to search. Second, Google's dominant position is largely unchanged year over year, hovering right around 65%. Another worthwhile fact is that since July 2010, Microsoft's algorithm and search platform has been driving Yahoo!'s sites, pursuant to a December 2009 agreement. So although Microsoft has grown its share partially at the expense of Yahoo!, those gains only cannibalize its partner.
For even more detail, I went ahead and broke it down by month and added a line for Microsoft and Yahoo! combined.
Source: comScore press releases.
When including Yahoo!, Microsoft has grown its overall share, but not nearly as much as you would think judging by the company's figures alone. Meanwhile, top dog Google has barely flinched while the others fight for table scraps.
Qi Lu, Microsoft president of online service, detailed the company's plans to "change the game fundamentally" with Bing in order to capture market share. The goal is to get a deeper grasp of what a user is looking for when he or she hits the search button, whether it's game tickets, flight information, shopping deals, or local businesses.
Bing has a long, grueling battle ahead of it if it hopes to ever make a dent in Google's supremacy in the minds of netizens and wallets of advertisers. With $52.8 billion in cash and investments on the balance sheet, the software giant can afford to keep plunging money into its OSD and dream of sweet black ink. The question isn't whether Microsoft can continue, but whether it should.
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Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Microsoft, Google, and Yahoo!. Motley Fool newsletter services have recommended buying shares of Google, Yahoo!, and Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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