Microsoft Still Pushing Bing Despite Heavy Losses

Microsoft's online services division, which includes the Bing search engine, has lost more than $2.5 billion in the past year. But the company is continuing to fight to attract search users by adding special features for mobile users.

In its press release covering financial performance, Microsoft proudly announces that revenue from the online services edition grew by 17 per cent in the last three months of the year, and 15 per cent over the year as a whole.

Bing Revenue Still Far Below Expenses

Unfortunately, what it doesn't mention in the main release, but is detailed in the full financial report, is that revenue is still far below expenses. Across the year the division lost $2.5 billion and costs are running at roughly double the income.

While the division covers a wide section of business, Bing is its crown jewel. And while the company reports that Bing's use has increased dramatically, the information is a little misleading given the service has only been running a couple of years.

It appears that when you look at the combined searches under Microsoft's control, including those handled for Yahoo!, the total proportion is barely rising in the US and may even be falling worldwide.

New Bing Tools In-The-Works

Microsoft isn't giving up the fight however, and it's unleashing new weapons to help wage its search engine war.

The first new tool for Bing is DeskBar: a standalone software program that lets users search directly on their computer rather than visiting the Bing website, with the results presented in a more attractive and eye-catching way.

Although DeskBar may not catch on right away (given that many users are reluctant to install additional software that may clutter up both their machine and their desktop), the long-term goal looks to be to get DeskBar pre-installed on portable devices.

Bing Vision Coming to Windows Phone 7

There are also a couple of new Bing-related features scheduled for the next major update to the Windows Phone 7 smartphone system.

One, Bing Vision, allows users to take a photograph and then get relevant search results, such as background about a work of art or details about whether a particular bottle of wine goes well with certain foods.

The second, Bing Audio, lets users identify a piece of music that is playing in the background.

Tools Handy, But Not Original

Both of these concepts already exist on other systems, for example as Google Goggles or Shazam, but Microsoft's idea is to make the tools much more integrated to the phones, being part of Windows itself rather than needing a separate app installation.

In the case of Bing Audio, users who identify a song will be able to immediately buy it and have it downloaded to the phone. (Source: winrumors.com)

Despite these efforts, there are still some questions about Bing as a viable business model. Woody Leonhard of Infoworld estimates that to increase business enough for the division to turn a profit, Bing would have to improve so much that it was used in at least half of all US searches. Given Google's search engine dominance, it seems highly unlikely that will occur. (Source: infoworld.com)