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What if Microsoft Quit the Search Business?

· Business & Technology (rev 18:23) · No Comments

Bing

From either a commercial or an web ad, by now it’s likely you’ve heard of Microsoft’s anti-Google competitor, Bing. Bing was meant to help gain a chunk of the search market share from Google’s grasps, but now results in over $2 billion of loss each year. From The Daily Caller:

Amazingly, most everyone totally ignores a linchpin competitive assumption when they talk about search competition and Google’s antitrust liabilities – that Microsoft will always be a competitor in the search advertising business.

If Microsoft decided to stop losing $2 billion a year and reasonably exited the business for financial reasons like Yahoo did in 2009, it would change everything, from laying bare Google’s global monopoly power to cratering Google’s Microsoft-dependent antitrust defense.

This naive competitive assumption comes from widespread ignorance that Microsoft-Bing has never earned a penny of profit from search advertising and has little prospect of making a profit in the foreseeable future. In fact, no material search advertising competitor to Google in the U.S. or Europe earns a profit. Competition is not “one click away;” definitive monopoly is but one exit decision away.

And it doesn’t look like things are on the upswing for Microsoft’s search:

Only some professional investors are aware that Microsoft has cumulatively lost about $15 billion trying to compete against Google in search advertising. Microsoft loses about $2 billion a year in search, while Google profits $25 billion gross a year in search. Not only are Google’s search revenues ten times bigger than Microsoft’s they are growing faster too, meaning Microsoft is falling further behind.

Read more on The Daily Caller.