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's the author of "Microsoft 2.0" (John Wiley & Sons, 2008), which examines what's next for Microsoft in the post-Gates era.


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