Foley on Microsoft

Why Microsoft Won't Dump Bing

Many Microsoft shareholders, employees, partners and customers would like Steve Ballmer to resign (or be ousted) as CEO. Almost as many are agitating for Microsoft to push Bing out of the Redmond nest.

To all of those folks, I've got bad news: Ballmer is going nowhere soon, and Microsoft isn't decoupling the Online Services Division (OSD) -- the business unit that includes Bing and online advertising -- from the rest of the company.

OSD is still losing money, and lots of it. (Just see last month's Q4 fiscal 2011 earnings report if you demand proof.) And there's still no guaranteed time frame for a turnaround, but Ballmer & Co. are still Bing-o-philes ... and not all of their reasons have to do with Microsoft's Google obsession.

I really don't understand how Microsoft positions and "markets" Bing. Its "decision engine" differentiation campaign is fine, though I really don't see Microsoft as doing anything that's incredibly different from Google in search. The Bing PR campaigns -- paid celebrity endorsements of Bing, Bing-financed concerts, Bing-themed contests and so on -- might make some difference, but they seem like a waste of money.

There are other things going on with Bing, many of them just under the radar, which explain why Microsoft is throwing money into the Bing pit. Microsoft sees Bing as more than a standalone Web search engine -- it's a key selling point for the Windows Phone 7 platform.

There's already a Bing button in every Windows Phone 7-based device. And with the forthcoming Windows Phone 7 "Mango" OS release, there will be even more Bing functions. Bing Vision, the Microsoft equivalent of Google Goggles, is built into Windows Phone 7 Mango. This allows users to take pictures of bar-code-like tags -- and, for those in the United States and certain other countries, product labels, books, CDs, DVDs and so on -- and obtain instant information about them. Mango also includes Bing Audio, Redmond's competitor to Shazam, which helps phone users find information about (and purchase) music they hear and don't recognize. There's also Bing Scout, a local-search capability that zeroes in on sights, retail outlets and upcoming events in a user's geographical area.

The 'Softies also see Bing as an integral feature in the coming Windows Live TV service. The service, the next-generation mashup of IPTV and Xbox Live expected to be available later this fall, integrates the Kinect sensor. Microsoft is using Bing to let users of this service search for TV shows, movies and music with their voices.

Bing is also seemingly baked into the NuAds platform that Microsoft is pitching to advertisers desperately seeking new ways to get users to engage with their brands on TV. Viewers will be able to say "Xbox near me" to obtain the retail locations nearest them, while saying "Xbox schedule" will allow users to set calendar reminders for upcoming shows.

I wouldn't be surprised to see Bing more tightly coupled with Windows 8. Given there's going to be a Windows 8 App Store, users will need to search the new marketplace for apps.

While the world sees Bing as a distant No. 2 search engine, Microsoft brass and bean counters see Bing as a reusable component and asset that will be built into more and more products. Those who think Microsoft will discard Bing or sell it to the highest bidder are dead wrong -- that won't happen now or any time soon.



About the Author

Mary Jo Foley is editor of the ZDNet "All About Microsoft" blog and has been covering Microsoft for about two decades. She has a new book out, Microsoft 2.0 (John Wiley & Sons, May 2008), about what's next for Microsoft in the post-Gates era.

comments powered by Disqus

Reader Comments:

Tue, Dec 20, 2011 Frank

Microsoft bundles Bing into it's Windows Phone 7 except it's failing too. This is a company that has done nothing but engender ill will from young customers through their operating system, and on top of that I feel like a dork if I buy anything from them. They're a company that does a good job handling a monopoly, but not so good at competing otherwise.

Tue, Sep 27, 2011 Possom Ubuntuland

Google runs on linux! That is why Microsoft is tring to stamp out linux with the UEFI in Windows 8. Thank God for www.system76.com for the linux enthusiast. We will survive this attempt at a linux massacre!Oh yeah bing this across your stratosphere!

Sat, Aug 27, 2011 Mustang17 Irvine, UK

@ charbax I use Bing because I choose to, There may be a few other search engines out there, Google included. I am not lazy or unable to select another search engine. I like Bing, therefore I use it, its that simple.

Mon, Aug 15, 2011 dan England

@NateOregon I see you post without any knowledge of the giving subject... People were downloading apps on their windows mobile phones years before Iphones came along, all apple did was make the term "app store" popular. Thats it, their "innovation" or whetever you seem to be going on about was a simple name change from marketplace.

Mon, Aug 8, 2011 kvinnor ryska kvinnor

Firing Balmer is just a bump in the road towards fixing those bigger issues.

Sun, Aug 7, 2011 Nate Oregon

It seems like MS has Apple envy. App store for Windows 8!!!???? Is there something wrong with the application delivery options available for Windows today? MS has become the 'copy Apple and Google show' and they keep coming up second best. MS needs to get back to basics and focus on giving the consumers (especially SMB's) what they want - which is a reliable, scalable, non-bloated server and desktop environment at a reasonable price.

Wed, Aug 3, 2011

Microsoft needs to make a WP7 w/o the phone part. People still (and will continue to) want to buy music players. But with the Zune hw seemingly disappearing Microsoft has no offering. So you ask 'Why would someone want to buy a music player?'. Well I would like to connect my home entertainment sys to it and play music. Or connect it to my radio in my garage, or bring it to a friends house and connect to their stereo, etc etc.

Mon, Aug 1, 2011 Greg Midwest

I am a 25+ year year tech and have used Google for thousands of hours. I find it to be less helful in many ways than it used to be and find Bing in its present form, to find most things more efficiantly. I could not have said that for Bing 1 year ago. Microsoft is continuing to improve things in Bing. Some non general search related things are truly great. While there are some niche things Google still pulls up better for me, the days when it was meaningfully inferior to Google's search engine in the overall are gone. I use Bing as my default search by choice, not because I have some Microsoft fetish. It would be foolish for MS to divest itself of what is becoming a serious competitor in search. People that hold formulated opinions of Bing from time gone past should check in from time to time, things are not staying static with it's development. The same can be said for Google, although I cannot say I am fond of all of the changes on that front. It is good to see faster development cycles happening at Redmond. Even some out of the mainstream thinking (like WP7). It's very "non-Microsoft" from a tradtional perspective, which is a good thing for the company's future. As a side note, the "failure" of the Zune was not simply the going against the iPod, but due to the fact that MP3 players were going to be seriously on the decline due to the advent of music capable phones. At the point where Microsoft needed to make investment in making Zune a player, it was financially imprudent as the entire market segment, iPod included, was about to be diminished. The platform now is 3 fold, PC, handheld phone and tablet for services such as the Zune marketplace, iTunes and Rhapsody. In the end, Apple will bow to what they used to disparage, that is, "rental" subscription music. If Microsoft was smart, they would focus on making the Zune marketplace multi platform and multi-device and customizing it into it's WP7 phones in a compelling way. Specialized manufacturer closed-wall manufacturer specific hardware/software combinations will eventually lose the battle. Apple is already losing marketshare to Android for this reason. Portability of purchased apps to multiple platforms is key. In today's environment, this includes tablets, smartphones of varied platforms and PC's. Being available on the Windows platform was a primary reason why iTunes was successful and thus far the Zune marketplace has not been as successful for the same reason in reverse, even though it is really is nice .

Thu, Jul 28, 2011

I find nothing at all wrong with results from Bing. I use it as my default and it works well. Google by contrast seems to return more spam-type sites for my searches. One problem with Bing is the ubiquitous use of the word 'google' as a verb. So many use the word w/o giving it a second thought and this is even more true in the university where almost every instructor says 'just google it'. They don't say 'just bing it' or 'just search for it'. I on the other hand do make a conscious effort to say 'just search for it' or 'bing it'. Hype is the main problem for Microsoft, hype over Google, hype over Android (with that stupid green robot image), hype over iPhone as a fashion statement etc. But Microsoft doesn't seem to have any such following. Look at WP7, it really is a great platform in most respects, but the name evokes images of windows mobile. Should have called it the X-Phone or something. Then people talk about how 'OPEN' something is, usually w/o even knowing what it means. They say things like 'Im a techie and so use Android because I can do whatever I want'. So I ask, 'do you write apps for it?' and they say 'Nah I do cooler stuff like ROOT it'. Give me a break! Go write some progams for Android and WP7 (and not 'Hello World') and then back and talk to me about which has the cooler tools. Bahhh,,, I've just about had enough.

Thu, Jul 28, 2011 i_hack_sites http://hackertarget.com

Bing is not my default search but it does ok. However the last thing I read about it was that MS was trialling adverts within the results. Seems like a great way to wreck a half decent product. Looking back msn.com may have actually done ok if it was not so overloaded with adverts.

Wed, Jul 27, 2011 Eric Lewis Madison Wisconsin

Note to Charbax: I use Bing on purpose and I like it better than Google. My Ph.D. is in Computer Science ... and I am able to install and remove software from WinXP, Vista, 7, Mac etc. So by proof of existence, your statement is just wrong. I also believe it would be a mistake for MS to sell Bing. Also, has anyone looked at MSFT today? North of $28 and positive return for the year (for the first time this year I admit.) With a P/E of about 9 this stock has a lot of room to move, btw. IBM came back strong and MS could do the same. Google is even more of a one-trick pony that MS so perhaps the final chapter of the computer business has not been written yet.

Wed, Jul 27, 2011 Ric

Thanks tons for this analysis. Now I know I can avoid all M$ clutter beyond the desktop environment. I dont like bing and if I cant get away from it on the Phone 7 platform I feel much better about writing that off as well.

Thanks for consistently sucking in this arena M$, it makes my future tech purchases much easier and less risky.

Wed, Jul 27, 2011

If MS won't dump Bing, they better write a better algorhythm. Bing doesn't give me what I want. When I try searching by name for the local library hours, or a company I know exists, Bing does not return the entity's webpage on the first page! Others would write WTF but I prefer, "Seriously?" Google almost always has what I want as the first result. Sure, you guys are right; MS needs to adapt its core business strategies. It's really as simple as making things that really work, rather than thinking that the extremely well informed and connected public will tolerate not well executed services/products. That's why Apple wins. Apple produces things that not only work, they are cool, beautiful, elegant, beyond what people imagined. And, they function. Without much fuss. It's a philosphy that MS needs to understand. The main public is not geeky. They just want things that work. Or are beautiful. If it's both, all the better; there's no argument. Also, MS should advertise what it's best at: OneNote. It's revolutionary and no one can compare. But the competition is catching up. Bing sucks. stop advertising it. Windows Mobile 7 needs a lot of work. So sad it's not compatible with other MS products (like it can't even sync with Outlook). Suggestion: all MS employees should be required to think and focus for one hour daily about how to make MS the best company in the world; how they can in their employ revolutionize MS by being the best. Perfect. Cool. Beautiful. I bet Apple does something like that. Just look at how they've combined form and function and imagination.

Tue, Jul 26, 2011 Bryan S Redmond, wa

You are missing the big reason. Microsoft's master skills are in building desktop applications -- they are the best company in that market. The problem is that the shift is happening to: a) online ads (google), b) mobile/channel (Apple), c) online retail (Amazon), d) online platform (Amazon AWS, rackspace), e) content (NetFlix), and f) communication/community (Facebook, gmail). This means that Microsoft formerly was in the fast-lane strategically. They are now in the slow-lane. When Technology Companies go out of the fastlane, then they start to die (MySpace, Nokia, RIM, Yahoo, Novell, Wang). Microsoft's "Online Services" division is about getting Microsoft from the slow-lane back into the fast-lane. Wall Street short-term thinking is to cut expenses to maximize margins and cash flow. The problem with Wall Street thinking is that they are optimizing for the 12-months and less view. What they are missing is the 3+ year view where Microsoft needs to replace their shrinking industry (high priced OSes & high priced desktop apps). They need to replace those revenue streams as well as open up new multi-billion dollar markets to fuel future growth. Bing is so important because Google has proven that "ads" will probably be 20%+ of all revenue online and in the future, and it will be at $40 b to $400b market. Not only that, nobody else out there is positioned to be the "pepsi" to Google's "coke" in the ad market. That should be there for the taking for Microsoft. The small issue is if Balmer should be replaced (which is yes). The big issue is fixing Microsoft to be competent to compete in the new growing markets (Ads, Mobile, online workflow/apps, social). Remember that "Windows Live Spaces" was designed to be a full Facebook competitor -- if you look how it is designed. Luck for Microsoft, it failed in the shadows. However, Windows Live Spaces failing in an absolute and huge way illustrates something important -- that Microsoft's skills at developing applications is an absolute failure in the online world. Microsoft won't be fixed until they fix their ability to be in the fastlane building products in the online space. Firing Balmer is just a bump in the road towards fixing those bigger issues.

Tue, Jul 26, 2011 Avatar X Mexico City

And there are other two key uses they are infusing with Bing: WEA7 is going to have bing in it. I have not found a direct quote on if Toyota Bing system is indeed already WEA7 based, but the leaf got it and the next Microsoft Sync for Ford will be WEA7 based That should be more than enough to also expect UVO and Blue&Me next offerings to be also WEA7 based. So there should be Bing infused on all of those cars using any of those systems by next year. The other is WEC7. That is also expect to have it coupled as a service. Silverlight TV TopBox, or what i still suspect could be the new Microsoft TV (3.0) will have Bing as the engine too. If it ever gets finally released that is. Meaning there is not really a limit on where and how Bing as a Search & Decision engine could be used. Further examples also include those MediaCenter based TopBoxes and of course Surface 2.0

Tue, Jul 26, 2011 Charbax Copenhagen, Denmark

Nobody chooses to use bing on purpose. I'm sure about 95% of Bing users are using Bing because they are too lazy or incapable of changing default web browser in Windows and too lazy or don't know how to change the default search engine.

Tue, Jul 26, 2011 Joe05

I wholly agree with your assessment , Bing is more than a search engine to Microsoft, it's a platform of it's own and it's becoming obvious that Balmer and company have bigger plans ahead.

Tue, Jul 26, 2011 MIKE NYC

I get it, because EVERYONE has to sell their soul to only the one thing that the entire world wants to, which is geGool, the ONLY search engine that should EVER exist...right?! Of course there should also ONLY be one music service and device and that should ONLY be the one from l'Appe. While we're at it, why don't we just scrap the ENTIRE base of pc's in existence and hand everyone a tablet from them as well! Anyone else should probably only seek out a nuLix machine... I seriously wish for an EMP wave to sweep the globe. >:(

Tue, Jul 26, 2011 Bob

As you can tell from the stock which is underperforming the market once again this year, most people understand that Ballmer likely isn't going anywhere. That doesn't mean they shouldn't voice their legitimate concerns regarding MS allowing another new venture to lose ridiculous amounts of money that will never be recovered. As you yourself point out, fundamental business basics haven't been addressed, like how is Bing different from Google? You can't win against a dominant incumbent with a largely me too product. You'd think MS would have learned that from Zune's abject failure, but Ballmer's MS is genetically incapable of learning from past mistakes. His view is try again only harder, instead of stopping to analyze why MS consistently fails in new markets, even while others like Apple almost always succeed. At some point shareholders will have had enough. It's already been a lost decade for the stock and arguably the company. And with the cash cows now in trouble, Ballmer is quickly losing the one thing besides Gates support that kep him in office: financial results. Once that's gone, he's gone. And even Gates won't be able to stop it. People used to think Jerry Yang would never be ousted too.

Add Your Comment Now:

Your Name:(optional)
Your Email:(optional)
Your Location:(optional)
Comment:
Please type the letters/numbers you see above

Redmond Tech Watch

Sign up for our newsletter.

I agree to this site's Privacy Policy.