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I'm sorry to say, but a $100 million spend on advertising is peanuts in this game. Google's revenues last year were $16 Billion. Two thirds of that, or $10 Bi

I'm sorry to say, but a $100 million spend on advertising is peanuts in this game. Google's revenues last year were $16 Billion. Two thirds of that, or $10 Billion came from Google owned pages (read search advertising). So, if my coctail napkin calculations are correct for every 1% share of their search advertising business Microsoft stands to gain roughly $100 million plus punch a competitor in the nose. Not bad. I wouldn't be suprised if Microsoft picked up an additional 5% of the search market with Bing. That means $500 million more in revenue. People forget that online and search businesses accounted for just $850 million of Microsoft's $60 Billion total revenue last year. Their revenue streams are pretty well diversified, and they can afford to bleed money in search for years if necessary. Google's primary source of revenue is search and advertising. Any serious loss of market share in that business is going to hit Google where it hurts: the bottom line. They have enough cash to take a few lumps. But, they've been around for 10 years, and they are still clining to a single source of revenue. That puts them in a dangerous position.

mattmaroon 17y ago
This is just senseless Microsoft bashing from someone probably incapable of original thought. The irony of saying "It's those effing customers. They keep choosing the best experience." to bash a company that owns 95% of the OS market is clearly beyond him. He clearly understands little or nothing about economics, marketing, consumer behavior, etc. Saying Microsoft should invest in areas not owned by Google is like saying GM should build planes because Toyota isn't.
jsqurred 17y ago
I think that this is probably the most insightful comment on this page. Microsoft can probably afford for Bing to fail, because it's not their bottom line. Their bottom line is licensing with OEMs and large businesses. I love Google products, but from a business perspective, their only source of profit is search advertising from their search engine. They are basically bleeding money through Youtube every single day with apparently no clear way to generate revenue. If Microsoft can focus on the domain of searches to very profitable topics, such as airline tickets and hotels, and provide a better user experience through statistical analysis and information, they can carve out a part of the search revenue. No one is going to seriously use Bing for casual search, Google is too good and too entrenched for that. But, perhaps for some areas, they might turn to Bing.
- mistermann 17y ago
  Not to mention, I think a large part of google's advertising revenue has got to be a waste of money for the person paying, it just hasn't been figured out yet.

mattmaroon 17y ago

This is just senseless Microsoft bashing from someone probably incapable of original thought. The irony of saying "It's those effing customers. They keep choosing the best experience." to bash a company that owns 95% of the OS market is clearly beyond him. He clearly understands little or nothing about economics, marketing, consumer behavior, etc. Saying Microsoft should invest in areas not owned by Google is like saying GM should build planes because Toyota isn't.

jsqurred 17y ago

I think that this is probably the most insightful comment on this page. Microsoft can probably afford for Bing to fail, because it's not their bottom line. Their bottom line is licensing with OEMs and large businesses. I love Google products, but from a business perspective, their only source of profit is search advertising from their search engine. They are basically bleeding money through Youtube every single day with apparently no clear way to generate revenue. If Microsoft can focus on the domain of searches to very profitable topics, such as airline tickets and hotels, and provide a better user experience through statistical analysis and information, they can carve out a part of the search revenue. No one is going to seriously use Bing for casual search, Google is too good and too entrenched for that. But, perhaps for some areas, they might turn to Bing.

mistermann 17y ago
Not to mention, I think a large part of google's advertising revenue has got to be a waste of money for the person paying, it just hasn't been figured out yet.