3 ms·

So, they lose 4 cents every time a search is performed (2 B USD in loss, 4 B searches per month, or 50 B per year) but they will make up on the volume? Not to m

by dotcoma 16y ago

So, they lose 4 cents every time a search is performed (2 B USD in loss, 4 B searches per month, or 50 B per year) but they will make up on the volume? Not to mention: they still use Overture to monetize search...

kenjackson 16y ago
First, the original comment is spot on with his/her analysis. I don't think you get how search and advertising works. Clicks lead to revenue, but you need clicks first. In order to get clicks you need to be competitive. With Google just a URL away they need to be nearly as good, if not better (due to name recognition) than Google to get a large share of the pie. So the problem is that they must effectively spend (or outspend) Google on search (data centers, employees, etc...) pretty much all the way to the point where they reach parity and beyond. All the while they bring in a lot less money than Google. If Bing can continue at its current pace and couple it with some real marketing strength, I think they have a real chance of flipping quarterly income from a $500M loss to $500M in earnings. The two wildcards in this space are social (Facebook) and mobile. I feel like mobile is a bigger deal than social. IMO advertising is the current and future business model of computing. I think MS gets this and realizes that this is the one fight they have to continue to fight.
- dotcoma 16y ago
  all I ask is: when? when will they be able to go from $500M loss to $500M in earnings?
  - kenjackson 16y ago
    I'd say Q3 FY12. The Yahoo search deal will be in place, but paid ads are lagging. Once the paid ads from Yahoo get bolted on with Bing, give it another quarter, to deal with the upfront costs. At that point I speculate they'll be close to $500M in earnings. And at that point, every percentage point they get it should increase earnings by $100+M.
    - dotcoma 16y ago
      are you telling me that they still use Overture for ads on Bing + Yahoo! Search but they are still using two different and separated versions of Overture, so that I have to get two accounts to advertise on the two search engines? wow...
      - kenjackson 16y ago
        Looks like their earlier than scheduled: http://www.mcintoshmarketing.com/ppc/yahoo-starting-migration-of-overture-to-msns-ad-center http://www.mcintoshmarketing.com/ppc/yahoo-starting-migratio... This is from Aug 31. Not sure what the state of it is now. Whenever this transition is complete.. .I'd add a quarter or two before we start seeing some respectable (relatively) earnings from Bing.
        dotcoma 16y ago
        this is good news. What would "respectable" mean for you?
        kenjackson 16y ago
        I think they need to come in at $100M+ earnings at least. That would be "high-class hooker" respectable. I think they really do need to look more at the $500M range though to say it was an unqualified success.
        dotcoma 16y ago
        how much does Google earn in a quarter in the US? 1.5 billion? 2 billion? Bing + Yahoo is about 20% of the market, or 1/4th of Google (in the US). So, 500 M is good, but 100 M means it would take years and years just to earn back what they have lost online in all these years, don't you think?

by dotcoma 16y ago

kenjackson 16y ago

First, the original comment is spot on with his/her analysis. I don't think you get how search and advertising works. Clicks lead to revenue, but you need clicks first. In order to get clicks you need to be competitive. With Google just a URL away they need to be nearly as good, if not better (due to name recognition) than Google to get a large share of the pie. So the problem is that they must effectively spend (or outspend) Google on search (data centers, employees, etc...) pretty much all the way to the point where they reach parity and beyond. All the while they bring in a lot less money than Google. If Bing can continue at its current pace and couple it with some real marketing strength, I think they have a real chance of flipping quarterly income from a $500M loss to $500M in earnings. The two wildcards in this space are social (Facebook) and mobile. I feel like mobile is a bigger deal than social. IMO advertising is the current and future business model of computing. I think MS gets this and realizes that this is the one fight they have to continue to fight.

dotcoma 16y ago
all I ask is: when? when will they be able to go from $500M loss to $500M in earnings?
- kenjackson 16y ago
  I'd say Q3 FY12. The Yahoo search deal will be in place, but paid ads are lagging. Once the paid ads from Yahoo get bolted on with Bing, give it another quarter, to deal with the upfront costs. At that point I speculate they'll be close to $500M in earnings. And at that point, every percentage point they get it should increase earnings by $100+M.
  - dotcoma 16y ago
    are you telling me that they still use Overture for ads on Bing + Yahoo! Search but they are still using two different and separated versions of Overture, so that I have to get two accounts to advertise on the two search engines? wow...
    - kenjackson 16y ago
      Looks like their earlier than scheduled: http://www.mcintoshmarketing.com/ppc/yahoo-starting-migration-of-overture-to-msns-ad-center http://www.mcintoshmarketing.com/ppc/yahoo-starting-migratio... This is from Aug 31. Not sure what the state of it is now. Whenever this transition is complete.. .I'd add a quarter or two before we start seeing some respectable (relatively) earnings from Bing.
      - dotcoma 16y ago
        this is good news. What would "respectable" mean for you?
        kenjackson 16y ago
        I think they need to come in at $100M+ earnings at least. That would be "high-class hooker" respectable. I think they really do need to look more at the $500M range though to say it was an unqualified success.
        dotcoma 16y ago
        how much does Google earn in a quarter in the US? 1.5 billion? 2 billion? Bing + Yahoo is about 20% of the market, or 1/4th of Google (in the US). So, 500 M is good, but 100 M means it would take years and years just to earn back what they have lost online in all these years, don't you think?