Nadella: Microsoft Will Not Sell Xbox or Bing

Nadella: Microsoft Will Not Sell Xbox or Bing

And a lot of other revealing commentary

Microsoft CEO Satya Nadella ended months of speculation about two of the firm's biggest money losers, stating emphatically that he has "no plans" to sell Xbox or Bing. Both businesses are responsible for several billions of dollars in losses over the past decade, and critics of Microsoft have long called for outright sales or spin-offs.

The comments came during an appearance at an industry trade show in which Mr. Nadella once again steered the conversation repeatedly to "software," a term that had briefly been out of favor at the software giant. But to hear him tell it, software is of course at the heart of everything Microsoft does.

"We're a software company at the end of the day," he said.

As for Xbox and Bing, Mr. Nadella issued almost identical statements for both troubled businesses.

"I have no intent to do anything different on Xbox than we're doing today," he responded when asked by a panelist whether he would "spin-off" the Xbox business. He also said that, prior to Nokia, Xbox is where all of Microsoft's hardware know-how came from.

Nadella was asked two questions about Bing, the first being whether his firm intended to keep "competing heavily against Google." To this he replied that "the core value of Bing" involves a lot more than the web service. But looking at just, the service does have 18 percent market share by itself, or 30 percent when you add in the Yahoo traffic it serves. That's the same market share as the iPhone, he noted, and no one is calling for Apple to sell that business.

When asked whether he would consider selling Bing to Yahoo, Nadella said he had "no plans" for such a transaction. "We are very happy to partner with Yahoo serving the search results," he added.

Mr. Nadella was asked a wide range of questions and some of his other comments are of course interesting. These include:

Why bother with Surface, which also loses money? Nadella noted that Windows and Windows Server both got off to slow starts too. "You've got to have patience and the right amount of impatience," he said. Surface Pro 3 is "promising," Nadella added.

Where you originally in favor of the Nokia purchase (before you were CEO)? "I'm not going to answer that." (He is widely reported to have been against the purchase.)

On competing against its partners (with Surface and Nokia). "I definitely don't want to compete with our OEMs," he said, echoing comments he made last week at the Surface Pro 3 launch event. "I want to create categories."

What is Bill Gates' role now at Microsoft? "He spent all day today at Microsoft in meetings," he answered. "The founder of a company can galvanize people in ways that another CEO can't. He's got some specific interests on Office and how to reinvent it. He's got an agenda which I subscribe to."

Why did Office come to the iPad first? "iPad has the most share," he said (though in reality it's because the iPad version was furthest along). "We are definitely going to have touch-first Office on Windows, and it is coming. But I didn't want us to hold back." Office is also coming to Android tablets.

Nadella's weirdest comment? After years of Microsoft denying the so-called "post-PC era"—the firm preferred for obvious reasons to describe this as a "PC-plus era"—Mr. Nadella said that we were in fact now in the "post post-PC" era. Feel free to debate the meaning of that one as you will, since there was no further context or explanation.

Mr. Nadella and corporate VP Gurdeep Singh Pall also showed off a coming Skype feature that will automatically translate speech in real-time, similar to the "Babel fish" from "Hitchhiker's Guide to the Galaxy" or the technology from any "Star Trek" episode. This has been widely reported as a new innovation, but Microsoft has been working on this for years and has in fact already demonstrated this publicly, including one instance from two years ago. (Thanks to Mary Jo Foley for that link.)

Nadella said this technology would make its way to "all devices," but would launch first on Microsoft devices. He figures it will be less than two years before two people who don't speak each other's language will be having fluent virtual conversations through Skype.

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