As is the norm these days, I woke up to some insanity in the Technology section of The New York Times. A column credited to two writers from Reuters Breakingviews recommends that Microsoft sell off its Bing online search engine, which has become "a distraction." Here's the rationale for this move:
Microsoft needs to concentrate on a different kind of search: finding a buyer for Bing, its online search business. Bing is the industry’s distant No. 2 after Google. It has become a distraction for the software giant — one that costs shareholders dearly. The division that houses Bing lost $2.6 billion in the latest fiscal year. Facebook, or even Apple, might make a better home for Bing. A sale would be a boon for Microsoft’s investors.
Microsoft’s online services unit, of which Bing is the main component, had $2.5 billion of sales in the year that ended June 30. Google is valued at about six times sales. At a 25 percent discount to Google, the unit would be worth about $11 billion.
Bing and sites it powers like Yahoo still control only about 27 percent of the United States market; Google has more than twice as much.
Only 27 percent, eh?
Huh. I wonder if we could think of another tech business that commands relatively tiny market share and yet never seems to get advice like this.
Oh, right: The Mac. In the most recent quarter, Apple sold 3.95 million Macs, compared to 84.8 million PCs, overall, worldwide. (That figure, as always, is an average of the estimates provided by IDC and Gartner.) That means that Macs represent just 4.65 percent of all PCs sold around the world. And maybe my memory is a bit hazy, but is the Mac considered anything other than a rousing success?
Here's the thing. I'm not saying Bing is poised to unseat Google. But come on. It controls almost 30 percent of the market in which the market leader's name is so entrenched it's commonly used as a verb. That's not horrible performance at all. And while I may vaguely agree that online search isn't necessarily central to Microsoft's core mission, I cannot agree that selling Bing makes more sense that continuing to invest in this product.
Coming from behind with small market share is tough. Just ask Apple: A decade ago it claimed less than 5 percent of the market for PCs. 10 years later, after massive growth that routinely outpaces general PC industry growth, the Mac commands--yep, you guessed it--less than 5 percent of the PC market.
All this said, I may be a voice of one on this topic. Charles Arthur from the UK's Guardian is also questioning the logic behind Bing this week.
So should Microsoft sell Bing?