Microsoft Needs Bing!

A couple bloggers for the New York Times recommended that Microsoft should sell Bing as a way to cut the company's online losses. Selling Bing will save money in the short term, but for the long haul it would cause Microsoft to be irrelevant in the internet and mobile future.

Mr. Hutchinson and Cyran have this to say in their blog post regarding their stance on Microsoft selling Bing:

Microsoft needs to concentrate on a different kind of search: finding a buyer for Bing, its online search business. Bing is the industry's distant No. 2 after Google. It has become a distraction for the software giant --- one that costs shareholders dearly. The division that houses Bing lost $2.6 billion in the latest fiscal year. Facebook, or even Apple, might make a better home for Bing. A sale would be a boon for Microsoft's investors.

They (Hutchinson and Cyran) claim that Microsoft could sell Bing for $11 billion, based on sales related to search, and that overall it would result in a 10% increase in profit for Microsoft.

Both bloggers are so wrong, I don't even know where to start!

First and foremost, Bing didn't lose $2.6 billion for Microsoft this past year; the entire online division did. There are other products and services within Microsoft's online division that bring in little to no revenue. As Hutchinson and Cyran state in their post, Bing brought in $2.5 billion in sales for the year that ended at the end of June. So with the data given, it's hard to know the numbers for Bing alone.

But more than that, Bing is central to Microsoft if they plan on succeeding in the future, especially in the mobile market. A major reason Microsoft needs Windows Phone to succeed is because of all the ad revenue from online searching. Mobile search can and will become the glue that holds all the other mobile services and programs together, and that's an area Microsoft needs to succeed in!

Google doesn't get any money for licensing out Android; instead its revenue comes from search, maps, Gmail and other Google services. Microsoft will need the same sort of business model if it plans to thrive in the mobile market. For them to do that they will need a search engine, and a damn good one. And Bing is a very good one, and continuously getting better.

If Microsoft abandons Bing, they might as well abandon its entire online division. Other than Hotmail, Bing is its only big internet service. But giving up online means giving up mobile, and that would ensure Microsoft's failure.

It's true that selling Bing would be a smart choice for the short term; but in the long term, it would be a disaster.

As I state in the title, Microsoft needs Bing!

Original Article