Tagged in: microsoft
Microsoft is out with its latest earnings report, and while Wall Street seems to be responding favorably to the news, the company continues to struggle financially in the area we focus most on – the Web.
Specifically, the company’s online division reported a loss of $480 million in the quarter on revenue of $490 million. That’s less revenue than last year, when it pulled in $520 million, and a bigger loss as well versus the $321 shortfall in the first quarter of 2008.
Microsoft’s primary plan to reverse this trend is Bing (Bing), which it’s in the midst of spending $100 million to promote. There are a few reasons to be optimistic:
Within the next year or so, Bing will become Yahoo’s search engine, giving Microsoft a larger chunk of the search market to monetize.
Bing is the default search engine in IE8, which ships with the just released Windows 7. Don’t underestimate the power of bundling.
Beyond that, CEO Steve Ballmer has said he’s willing to spend 5-10% of his company’s income over the next five years to make search a success for Microsoft. Will it work? Perhaps, but as this latest report shows, the company still has a very long way to go.