Microsoft said it had no reason to doubt comScore’s figures. It added that it is committed to Bing, which is a core part of Microsoft’s game console Xbox and its coming voice assistant on Windows phone. Bing also powers other companies’ sites and devices, including Apple Inc’s Siri and soon Apple(AAPL.O) desktop search. Bing is integrated into translation features on Facebook and Twitter.
Microsoft search advertising revenue rose 38 percent last quarter, helped by higher prices and more searches, it said in its last quarterly report, without disclosing dollar figures.
Microsoft’s online services unit, which includes Bing, lost more than $14 billion in Bing’s first four years, including the cost of a failed acquisition. Last year, Microsoft put Bing in a new reporting group so its financial performance is obscured, but many on Wall Street assume Bing is still losing money.
Craig Beilinson, director of consumer communications at Microsoft, said it “continues to gain traction” as a standalone search engine and powering other companies’ products.
While Bing has grown, that improvement has come mostly at the expense of Yahoo, according to comScore figures. The combined share of Bing and Yahoo has risen less than one percentage point in five years, taking share from smaller competitors Ask.com and AOL Inc, not Google.
Some search marketers say they like having an alternative to Google, and that Bing/Yahoo can be a good investment for some clients.
“Clients that have an older demographic, we sometimes do better on Bing or Yahoo,” said Pauline Jakober, founder of Group Twenty Seven, which advises mid-sized clients on paid search ad campaigns. Business-to-business, like janitorial or industrial types, could do well on Bing, while tech clients might not even want to advertise on Bing, she said.
But Bing has drawn criticism from some investors because it is expensive to operate, requiring resources from engineers to server farms.
The new search data called into question Bing’s usefulness, said Todd Lowenstein at HighMark Capital Management.
He and other investors believe Microsoft should focus on products that businesses pay for, such as the Office suite of products and the Windows operating system.
“Microsoft would be better served selling Bing to another player who can use the asset,” he said.
Ironically, Google does not highlight this weakness any more than Microsoft.
“Google loves the fact that anybody other than Google looks like they are doing better,” said Danny Sullivan, longtime industry observer and editor of the Search Engine Land blog. “It’s a very handy tool for them to go out and say you don’t need to be regulating us, look, the market’s strong.” (Reuters)
