Should Microsoft unload Bing?

With Bing racking up big losses and proving a distraction to its parent, Microsoft should sell its premier search engine, says a Reuters opinion piece.

Lance Whitney/CNET

Microsoft should consider selling Bing, says a Reuters opinion piece that's gained attention in the last day or so, after being published last Friday.

Though the search engine has grown in market share and popularity since its debut in 2009, it's still a money-losing proposition and a distraction for its parent, claims Reuters columnist Robert Cyran. Despite the flush of cash that Microsoft has poured into Bing, the search's engine's online services division lost $2.6 billion in the company's latest fiscal year, he says.

Microsoft believes Bing provides a boost to some of its other businesses, such as mobile phones and software. But Cyran doesn't see much evidence to support that theory.

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Bing's share of searches has continued to rise, as shown in reports from ComScore and Experian Hitwise , but it still holds less than 30 percent of the market, compared with Google at more than 60 percent.

How much does Cyran think Microsoft could rake in from a Bing sale? The company's online services business, of which Bing is the star player, provided $2.5 billion in sales for the fiscal year ended June 30. Google is valued at about six times its sales for the past 12 months. Assuming a 25 percent discount to Google, the online services unit itself could be worth around $11 billion.

Who would buy Bing? Cyran points to Facebook, which already integrates Bing's search results , and could use the power of the search engine to better compete with Google and its new Google+ social network. Apple might also be a good fit.

Overall, Cyran sees a Bing sale as a good deal for both Microsoft and its shareholders, a move that would not only bring in some cash but also stem the online division's losses.

Of course, all of this is just Cyran's opinion. Others, including Computerworld's Preston Gralla, see things differently.

In his own blog post published yesterday, Gralla reminded readers that Bing itself didn't lose $2.6 billion last year, rather Microsoft's entire online services division did. The division is home to other online entities that offer little or no revenue, while Bing itself did contribute the $2.5 billion in sales for the last fiscal year.

Unlike Cyran, Gralla sees Bing as "central to the future of Microsoft," especially in the area of mobile. He argues that the company needs ad sales from online searches for its Windows Phone efforts to succeed. As a comparison, Google makes most of its money from online search revenue and not from licensing its Android smartphone OS, a strategy that Microsoft will also need to follow if it wants Windows Phone to be competitive.

Finally, though Bing and its "powered by" Yahoo searches do account for only around 27 percent of the U.S. search market, that share still can bring in a lot of revenue and is just about Microsoft's only major online service.

"So yes, selling Bing would certainly be good in the very short term for Microsoft, because it would bring in substantial revenue from the sale and pare short-term losses," Gralla said. "In the long run, though, it would be a disaster."

 

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