Yesterday, WinBeta reported on the news that Microsoft is shutting down its own ad display business.
In a deals with AOL and AppNexus, Bing will become their portfolio of sites’ search engine while Microsoft gets out of the ad display side of the equation. This news, combined with Bing’s market share of 20% after years of competition, may seem bad for Bing on first glance. But Danny Sullivan of MarketingLand learned otherwise in an interview with Rik van der Kooi, Microsoft’s vice president of its ad business.
Van der Kooi confirmed to Sullivan that Bing is making money as a standalone business. Van der Kooi goes on to say:
“We are deeply committed on the search side. We see it as a business that we’ve built out over the past six years as sustainable and standalone… It’s a multibillion dollar business, and it does pay for itself right now.”
He also stated Microsoft’s commitment to Bing “is very deep and therefor critical for us to continue to monetize that business.”
In light of this news from Microsoft it may be that yesterday’s announcement was about Bing repositioning itself to focus on its search capabilities, rather than spending resources on the highly competitive business of display ad purchase. as Sullivan notes in his article:
“…inventory and ad sales platforms are largely controlled (in the US) by only three companies: Google, Bing and Yahoo. In contrast, if you want to make a display ad purchase, there are a dizzying array of platforms and providers all competing for your money.”
Microsoft’s shedding of its ad display business may allow it to focus more on Bing’s growth as Bing, and Cortana, continue to expand not just on websites like AOL, Yahoo, and AppNexus, but also across Microsoft’s own services as well, from phones to Office 365.
Do you think Microsoft is focusing on the right areas to continue Bing’s growth and to add to the value of Microsoft’s services?Further reading: AOL, AppNexus, Bing, Google, Microsoft, Yahoo