Yesterday, CNN Money released data indicating that Bing and Microsoft Online Services are losing a staggering $1 billion per quarter. This number, which equates to over $11 million per day and $462,962 per hour, is especially concerning since it has occurred in spite of Bing’s steady growth. Since 2007, when Microsoft began tracking the profitability of its search engines, Microsoft search engines have lost a total of $9 billion.
Since Bing launched in late 2009, its market share has nearly doubled. When the “decision engine” debuted its market share was 8.4% and that percentage has steadily grown to 14.7% of the current search market.
However, it is important to note that Bing’s steady growth has not been at the expense of Google, Bing’s primary competitor. Instead, the growth has been at the expense of Yahoo, AOL, and Ask.com. Since Bing’s launch in 2009, Google has only relinquished two-tenths of one percent of its market share and is still the dominant search leader with 64.8% of market share.
In order to be profitable moving forward, Bing must be able to capture market share from Google. Industry experts estimate that Bing must reach approximately 25% to 30% of market share to generate a profit.
Qi Lu, Microsoft’s President of Online Services, said Bing has no desire to “out-Google Google.” Instead, he indicated that strategic search partnerships will help Bing to achieve a greater “semantic understanding” of the Web. Once this semantic understanding is achieved, it will enable Bing to understand queries that are not noun-based and set itself apart from the competition. In addition, Bing recently launched adaptive search and several other new features that appear promising.
If Bing is going to capture market share from Google and become profitable, it has a long journey ahead. For now, Google is a verb and Bing is just another search engine rapidly losing money.
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