3 ms·

Microsoft has probably burned in that neighborhood to get Bing to where it is now, they probably would have been better off if they had been able to close that

by guelo 11y ago

Microsoft has probably burned in that neighborhood to get Bing to where it is now, they probably would have been better off if they had been able to close that $45b deal.

ekianjo 11y ago
They burned a lot of money for sure, but close to 45 $B? No, probably not.
mrcwinn 11y ago
Having no citation or inside knowledge, I can say for certain they did not spend $45 billion to develop, market, and grow Bing.
smt88 11y ago
That's an unreasonably high estimate, and there is some data to support the idea that it's unreasonable[1]. Microsoft has been losing, at most, a few billion[2] a year on Bing. Assuming they've spent $45B since 2009, that's $6.4B per year spent on Bing. A net loss of $2B on Bing would mean Microsoft is making $4.4B per year, which isn't in the ballpark. 1. http://www.businessinsider.com/chart-of-the-day-microsoft-online-operating-income-2012-10 http://www.businessinsider.com/chart-of-the-day-microsoft-on... 2. http://hal2020.com/2013/01/18/about-that-2b-annual-loss-from-microsofts-search-business/ http://hal2020.com/2013/01/18/about-that-2b-annual-loss-from...
- guelo 11y ago
  Even if the real number is only in the $20-30B range I'd still consider that "in the neighborhood" as I said. And they would have had a much stronger start by not having to build a brand from scratch.
  - smt88 11y ago
    I take your point, but I want to add a couple more things. Buying a company costs a lot more than the purchase price. Due diligence, regulatory compliance, legal expenses, HR expenses, lost productivity due to changes, employee turnover, and other factors put a huge premium on top of that price. Plus, a company that you buy has its own cash-flows, assets, and liabilities, and those might be costly, too. It's not always a good idea to buy a ship that's slowly sinking. I think Microsoft has done incredibly well without Yahoo, and it's also using Bing in interesting ways that don't require direct competition with Google (powering Cortana, for example).
    - jacquesm 11y ago
      You forgot break-off risks related to the buyer.

by guelo 11y ago

Microsoft has probably burned in that neighborhood to get Bing to where it is now, they probably would have been better off if they had been able to close that $45b deal.

ekianjo 11y ago

They burned a lot of money for sure, but close to 45 $B? No, probably not.

mrcwinn 11y ago

Having no citation or inside knowledge, I can say for certain they did not spend $45 billion to develop, market, and grow Bing.

smt88 11y ago

That's an unreasonably high estimate, and there is some data to support the idea that it's unreasonable[1]. Microsoft has been losing, at most, a few billion[2] a year on Bing. Assuming they've spent $45B since 2009, that's $6.4B per year spent on Bing. A net loss of $2B on Bing would mean Microsoft is making $4.4B per year, which isn't in the ballpark. 1. http://www.businessinsider.com/chart-of-the-day-microsoft-online-operating-income-2012-10 http://www.businessinsider.com/chart-of-the-day-microsoft-on... 2. http://hal2020.com/2013/01/18/about-that-2b-annual-loss-from-microsofts-search-business/ http://hal2020.com/2013/01/18/about-that-2b-annual-loss-from...

guelo 11y ago
Even if the real number is only in the $20-30B range I'd still consider that "in the neighborhood" as I said. And they would have had a much stronger start by not having to build a brand from scratch.
- smt88 11y ago
  I take your point, but I want to add a couple more things. Buying a company costs a lot more than the purchase price. Due diligence, regulatory compliance, legal expenses, HR expenses, lost productivity due to changes, employee turnover, and other factors put a huge premium on top of that price. Plus, a company that you buy has its own cash-flows, assets, and liabilities, and those might be costly, too. It's not always a good idea to buy a ship that's slowly sinking. I think Microsoft has done incredibly well without Yahoo, and it's also using Bing in interesting ways that don't require direct competition with Google (powering Cortana, for example).
  - jacquesm 11y ago
    You forgot break-off risks related to the buyer.