Foley on Microsoft
Bing Is a Misconstrued Asset
Microsoft needs to start utilizing the value of Bing that moves past just its online search capabilities.
- By Mary Jo Foley
Many Microsoft watchers still consider Bing a useless Microsoft asset that Microsoft should shed. I'd argue Bing is actually one of Microsoft's least understood resources and a building block for its future.
The difference is in the definition. Yes, Bing is a Web search engine that remains a very distant No. 2 to Google, despite the boost in market and usage share that Microsoft's partnership with Yahoo has brought to the table.
But even if its chances of catching up with Google in search are slim, Bing means so much more than that to Microsoft. Bing Advertising is currently contributing multiple billions to Microsoft's bottom line. Microsoft has made no bones about its plans to offer users more free ad-supported software and services. As privacy watchdogs have discovered, Microsoft has turned on by default in Windows 10 the ability of apps to use a unique Microsoft-generated Advertising ID for ad-targeting purposes. Yet Web search advertising is just the tip of the Microsoft search iceberg.
Bing -- which I'm using in its broadest sense as meaning Microsoft's search smarts -- is more than ever becoming an inextricable part of nearly every Microsoft product and service. That Cortana search box that's so prominent in Windows 10? Powered by Bing. Cortana really is Bing with a prettier face and voice. Microsoft's speech recognition and synthesis work? Another Bing-powered experience. Microsoft's growing family of analytics, data mining and a number of its next-generation Office technologies all rely on Bing on the back-end.
The billions that Microsoft has been pouring into Bing over the past decade or so, contributing to its public image as a bottomless money pit, are starting to pay off for Microsoft. Bing is still not officially profitable. But that's a milestone that Microsoft is expected to hit in the next few months as the company's break-neck spending on the required datacenter assets to power Bing are finally tapering off.
Bing has progressed in line with how expectations for search have evolved, Microsoft execs like to say. Instead of just helping users find more (via URLs) and then knowing more, search now also is about completing tasks.
The way Microsoft has been tackling this evolution revolves heavily around "Satori," its search repository. The Satori team has been working to extract billions of entities, each with their own attributes and actions, from billions of Web documents, and then establishing the relationships between these entities. The result is what Microsoft refers to as a public graph. Microsoft is using this graph to make more useful the interactions between its own products, like Xbox, Office, Windows and its various cloud services. The company also is planning to open up this graph to its customers and partners to build their own services that rely on Satori.
Bing sits in the Microsoft Applications and Services Group, as does the broader Information Platform Group (IPG). It seems the IPG team is the one charged with harnessing and extending Microsoft's search technologies to create information-centric services and applications. Bing, the Web search service, gives Microsoft information on Web user intent. Paid search advertising provides the company with information on advertiser intent. Cortana, the new voice-enabled digital assistant built into Windows 10, contributes smarts about conversational user intent, and Satori, with entity-related intent. Combine this information with Microsoft's growing machine-learning presence, and Microsoft's longer-term, big-picture plans for Bing-powering everything become clear.
Increasingly, I think of Microsoft as the productivity company. The seat of power and intrigue these days is more in the Applications and Services Group than it is in Windows and Devices.
Microsoft is unlikely to ever be as dependent on search advertising as Google, which continues to derive the vast majority (more than 95 percent) of its revenues from search ads. By going back to focusing on its software and services expertise, with an added search-powered twist, Microsoft may have found a way to capitalize on its search investment without simply trying to ape Google.
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.