Despite Failure, Microsoft Holds Onto Bing

In the world of online search engines, Microsoft’s Bing is definitely not unheard of. After coming out in June of 2009, Bing is the forth largest search engine in the world and is used for aproxamately 3.25% of web searches. While this is somewhat of a low number, it is important to consider that in retrospect to the number of web searches done on a daily basis, 3.25% is not a bad number by any stretch of the imagination; especially for a search engine as young as Bing. However, in it’s 16 months of online existence, Bing has yet to pay off for Microsoft.

According to an eWeek article, the “Online Services” division of Microsoft – the division that handles Bing – had a loss of $560 million in the first fiscal quarter of 2011. While this may seem like simple bad luck, the fact of the matter is that this loss is just another step in a trend of losses for Microsoft’s Online Services Division, and is a more significant loss than the division’s $477 million loss in the same quarter in the 2010 fiscal year.

While I never really hesitate to throw insults at Microsoft, it’s obvious that the company has been somewhat successful lately. With the release of Windows 7, the 2010 version of the Microsoft Office suite, and the Windows Phone 7, it should come as no surprise that Microsoft posted a $5.41 billion net income this quarter. However, despite Microsoft’s overall success Bing is costing the company a significant amount of money.

In 2009, Jeff decided to use Bing exclusively for a week, and came to the conclusion that Bing was a “solid product.” And while this conclusion was drawn shortly after Bing was announced, my more recent experiences with Bing have brought me to the same conclusion: Bing is definitely a worthy search engine.

But if Bing is such a great search engine, why isn’t it paying off for Microsoft? To answer this question, we really have to ask ourselves why more people aren’t using Bing. After all, if Bing were more widely used, Microsoft would make more money from advertising and would ultimately begin making profits instead of losses.

Personally, I would use Bing more often if I remembered about it. Like many people that I’ve talked to, I neglect to even think about Bing when I do a web search. This is simply because I’ve used Google for such a long time, and feel that Google has a more “comfortable” interface. Microsoft tried to introduce people to Bing with the use of television commercials, but the fact still remains that people are going to stick to what they are comfortable with. This is the same reason that Cuil – a search engine that was supposedly going to compete with Google – didn’t take off to the extent that some first thought it would. Moreover, many of the features that defined Bing (better video search, image search, etc) have been introduced to Google’s search engine, meaning that web users are able to get the best features without leaving their “comfort zone.”

So, at the end of the day, the one true question is why Microsoft has yet to pull the plug on Bing. First off, Bing is still somewhat young of a search engine and will likely have opportunities to expand its user-base in the future. While this is definitely an answer to the question, you also have to consider that from a business perspective, killing Bing would force Microsoft to admit failure in a time where their public image is still recovering after the failure of Windows Vista. For this reason, it may be in Microsoft’s best interest (in terms of public image) to keep Bing around even though it is costing Microsoft a considerable amount of money.

What do you think about Bing? Is Microsoft throwing money away, or will the search engine ultimately pay off for the software giant? Share your opinion in the comments.