Friday, September 23, 2011

Is This A Business? 

Reports have come out that Microsoft has spent $5.5 billion to date in an effort to establish its search engine, Bing.  From an economic perspective, one must ask if Bing is a business.  Thus far, it is a money pit.  Microsoft has enough cash to continue losing a billion a quarter for some time to come, but eventually someone has to make a decision to keep or chuck the search engine.  If Microsoft elects to keep it, the firm needs to put Bing on a more economic basis.  That will mean shrinking it or acquiring other search engines and migrating their users to Bing.  Either way, there is a communications issue that Microsoft needs to confront -- proving that Bing is not a loser in the war against Google.  There isn't much that Microsoft can say today.  


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