As Microsoft is on the verge of a major company reorganization, rumored to take place July 11th, a new detail has surfaced today. Did you know Microsoft’s online division, which includes MSN and Bing, has lost $10.9 billion dollars since Q1 of 2005?
Microsoft’s online division has failed to overtake Google and has resulted in a loss of $10.9 billion dollars since Q1 of 2005. Just last quarter, Microsoft’s online division had an operating income loss of $262 million. That’s a lot of money!
“The gawdy losses always hung over Bing, Microsoft’s search engine that’s failed to disrupt Google’s search dominance. The best you can say for Bing’s impact on Google is that Google has been stuck at 65% of the U.S. search market. If it weren’t for Microsoft dumping money into Bing, it might be at 90%,” a report from BI states.
But here’s the kicker. Under the proposed reorganization of Microsoft, the online division will no longer stand out as the weak link when it comes to operating income loss. In fact, Bing and MSN would fall under the new services umbrella (remember Microsoft wants to be all about devices and services?). This means Microsoft can hide its weak link or blame another service or category for operating income losses.
In other words, the services group would appear to be making less money than before but at least the negative stigma of Microsoft losing so much money wont be there for everyone to criticize. A smart move on Microsoft’s part. The software giant is rumored to unveil its restructuring plans this Thursday, July 11th.Further reading: Bing, Microsoft