Microsoft's Bing will make money: executive
SEATTLE (Reuters) - Microsoft Corp's 10-month-old search engine Bing, which has struggled to make headway against Google, can be a viable runner-up and make money online eventually, according to one of its top executives.
Context & Ripple Effects
Ten months after Microsoft's May 2009 search relaunch, a senior executive is publicly committing to Bing's economics: viable runner-up, profitable eventually. The claim lands while Google's share of U.S. search remains effectively untouchable, making this a defense of the investment more than a victory lap.
The framing matters because Microsoft is spending heavily across fronts at once — it has also mocked Apple's iPad and prepped a new Windows Mobile for Mobile World Congress this month — so online services are being asked to justify their place in the portfolio against a rival that just disclosed the Operation Aurora intrusion and is expanding its lobbying footprint in Washington.
First-order effects
- Microsoft's online division faces internal pressure to show a credible path from loss-leading infrastructure spend to revenue, with this executive statement serving as the public commitment investors will hold it to.
- Google retains its dominant position unchanged; Bing's immediate effect is competitive presence in the ad market rather than share displacement.
Second-order effects
- Advertisers gain a functioning second search-auction marketplace, giving them pricing leverage against Google's rates even if Bing's volume stays small.
- Yahoo and other mid-tier search players face a better-funded number two competing for the same residual query volume and publisher partnerships.
Third-order effects
- If the pattern holds, web search settles into a structure where the runner-up position is sustained by a parent company's balance sheet rather than standalone profitability, raising the odds that Google's scale draws regulatory and antitrust scrutiny rather than pure market discipline.
The trend: Search is hardening into a two-player market where Microsoft treats persistent losses as the cost of staying relevant in advertising and data.