Bing has cost Microsoft $5.5 billion since launch
When Microsoft first introduced the Bing search engine it was surprisingly good. People liked the way you could change the background of the homepage, it started generating traffic within days of launch, and looked to offer up some serious competition for Google.
But it looks as though Bing has been nothing but a major draw on Microsoft’s cash reserves since its launch in 2009. In just two short years Bing has cost Microsoft $5.5 billion. In return, it has gained a 14.7% share of the search market, half of which has come from the Microsoft-Yahoo! search deal.
Microsoft is quite experienced at entering a market late, spending a lot of money, and pushing its way into a strong position. You only have to look at its gaming business and the Xbox 360 in particular to see that first hand. But the worrying thing with regards to Bing is Microsoft’s market share grab has had no impact on its main competitor.
When Bing launched, Google Search had a 65% share of the market. Now, that share has dropped only slightly to 64.8%. In other words, while Bing is taking market share from other smaller players and partners, Google remains very strong and profitable in the search space.
Microsoft’s answer to turning billions of lost revenue into a profitable search business is to attempt to change how people search. Rather than the keyword searches we all rely on today, Microsoft wants natural language and questions asked instead. Although no specific examples were given, Microsoft also wants Bing to be more than just search, and with that will come revenue.
With Google continuing to look untouchable at the top of the search tree, Microsoft has a lot of work to do and probably billions more to invest if it intends to gain an equal footing with its rival. You also can’t discount Google’s role in all of this, and its continuing push to innovate both in and around search. Read More......
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