by Shane O'Neill

Microsoft, Don’t Sell Bing (Nobody Could Afford It Anyway)

Apr 27, 20123 mins
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Bing may be a money pit that hasn't made a dent in Google, but selling Bing to Facebook, as rumors suggest, would be giving up too soon. Plus, who other than Microsoft can afford Bing?

How do you solve a problem like Bing? Do you sell it?

After all the cross-platform integration with other Microsoft products and hundreds of millions spent in advertising, the Bing search engine remains a money pit, losing Microsoft roughly $2.6 billion during the last fiscal year. Microsoft has lost $5.5 billion on Bing since it launched in 2009.

That loss alone may be good reason to hawk Bing to the highest bidder. Facebook has popped up recently in a swirl of scuttlebutt as a potential Bing buyer. But really it’s all speculation, led by unnamed sources from Microsoft and Facebook, with Wall Street analysts fanning the flames. Microsoft and Facebook have had a search partnership since Oct. 2010 where Facebook “Likes” and friends’ preferences are included in Bing searches.

Wall Street likes the idea of Facebook buying Bing because, with Bing, investors can only see the hit to Microsoft’s margins. To them, search is a costly distraction that drags Microsoft down. Indeed, Bing has been a brutal 7 percent hit on Microsoft’s operating margins.

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But Wall Street assumes that just because Facebook is a successful Internet company that it could, or would even want to, take on the burdens of owning a search engine.

Let’s face it, Facebook could not handle the debt-heavy Bing and would be crazy to compete with Google in search. Google is the world’s default search engine and nothing has been able to change that. Google is only company that has successfully monetized search. I repeat: Google is only company that has successfully monetized search.

At least Microsoft, subsidized by its massive enterprise profits, can afford to keep Bing going despite the crushing losses, and at least keep Google honest.

This week, the subject of a Bing sale came up in a New York Times Bits blog post about Facebook’s purchase of patents that Microsoft bought from AOL.

“Some executives within Microsoft have advocated selling Bing to another company, with the idea that a company better focused on the Internet market could pose a more credible challenge to Google, according to several people with knowledge of the discussions who didn’t want to be identified talking about internal deliberations.”

Allegedly, Microsoft sent out a feeler to Facebook a year ago about an offer to buy Bing and got a “thanks, but no thanks” from Zuckerberg & Co.

Yet if Microsoft was considering selling Bing, would it be going to all the trouble of integrating the search engine into Xbox 360, Windows Phone, Windows Live, Windows 8, as well as engage in search partnerships with Nokia and Facebook? Wouldn’t it be easing off the gas pedal if it was preparing Bing for a sale?

Sure, bleeding billions is no fun, even for the filthy rich Microsoft, but Ballmer and company shouldn’t offload Bing to Facebook or anyone else anytime soon. Microsoft is at a crossroads where Bing growth on new devices (tablets and smartphones) and platforms (Windows 8) is possible. To sell Bing now will sell a good search engine short. And it would make life too easy for Google.

What do you think? Should Microsoft hang in there with Bing or sell its way out of search?