Microsoft to launch Bing Fund angel investment incubator
For the past few weeks, there've been some tweets showing up in my timeline from something called the Bing Fund. ZDNet (and Techie-Buzz) blogger Manan Kakkar has noticed these, too. The tweets lead to a BingFund.com Web page that tease …
Context & Ripple Effects
Bing arrived in 2009 as Microsoft's revamped search engine, and by early 2010 an executive was publicly insisting it would make money. Three years on, the division's economics look worse, not better: Microsoft took a $6.2 billion impairment charge on ad-acquisition aQuantive in early July 2012, the same week its shares had what one report called an ugly start to its most important financial year.
Against that backdrop, the Bing Fund tease matters as a change of instrument. Rather than another large acquisition, Microsoft appears to be testing small angel-scale bets — surfaced through tweets and a BingFund.com teaser page that ZDNet and Techie-Buzz blogger Manan Kakkar tracked down — aimed at online startups rather than at buying technology outright.
First-order effects
- Online startups gain a new corporate-backed source of seed money and, presumably, distribution inside Microsoft's properties, with Bing Fund positioned as an angel-style incubator rather than a venture fund.
Second-order effects
- After writing off aQuantive's $6.2 billion, Microsoft is signaling it prefers many small strategic checks to large media acquisitions — pressuring its own business-development group and rival acquirers to compete for startup alignment with cheaper, earlier capital.
Third-order effects
- If the model holds, large platforms increasingly use balance-sheet seed programs to buy ecosystem loyalty at the earliest stage, making corporate incubators a standard layer between independent angels and full acquisition.
The trend: Platform companies are shifting from big advertising acquisitions toward seed-stage strategic funds that tie startups into their ecosystems early.