I track the comings and goings of the great and the good in our space, in part because it fascinates me, and in part because it helps point the way the market is headed.
Microsoft has been front of mind of late. In the specific case of our business we have been staring hard at Microsoft/Bing search traffic as an effective way to drive high-quality calls to our advertisers, and frankly we have found them wanting.
Put simply, it costs us more to drive that qualified call with their traffic than with other sources we use…quite a lot more. It’s another reflection of the struggle the mighty softies have when it comes to delivering great search and value to the ever-expanding online market.
It’s been a tough month all round. A week or so back, Microsoft finally wrote off their ill-fated aQuantive aquisition to the tune of about $6 billion. It looks like their online division (read Bing) will lose another $2 billion this year, and in a ruling today the EU may well end up fining them $7 billion for breaking their agreement to provide other browser options for Windows 7 users in Europe. This last issue is just incredible. The EU can fine a company up to 10% of their revenue for failing to comply with an agreed ruling (in this case the 2009 anti-trust case against them)…back when it was Microsoft rather than Google who was the favorite whipping boy of the EU anti-trust police. You have to ask “what were they thinking,” and did they think anyone would notice?
Add those items up and you come to about $16 billion of trouble…equivalent to the entire GDP of a decent-sized third world country like Nepal (it is, I checked) or about 30% of the cash reserves currently on hand at Microsoft. It’s reaching a point where some heretics are even voicing the unthinkable: that MSFT should throw in the towel on search and focus on things it stands a chance of winning at and maybe give/sell Bing to somebody who might really make a difference with it … like Facebook … watch this space.