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back to article Bill Gates: Sell off Bing? Nah. Xbox? Maybe...

Microsoft cofounder and board member Bill Gates says he's leery of unloading the company's historically loss-making Bing division, but he wouldn't necessarily be opposed to spinning off Xbox. Gates made the comments in an interview with Fox Business on Monday alongside mega-investor and Berkshire Hathaway CEO Warren Buffett. …

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Ready market...

Why not sell bing-bong to Yahoo! which already uses it anyway. Somebody might even make money.

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Re: Ready market...

Because Bing the site is only a very minor part of Bing the technology.

It is used heavily in their server technology and it powers Cortana. Now it is a bit like asking if it makes sense for Google to sell the technology behind Now or Apple to sell the technology behind Siri...

That said, I use Bing every now and then, but it isn't very good at search outside the USA and even worse if you are searching for non-English information. Ocassionally it brings up results that aren't in Google, but when searching in local language (I live in Germany), Bing's results are very poor - which is probably why Cortana is rumoured to first appear hear this time next year, whilst the US get it now (developers) and in June for official release and the UK should get it over the summer.

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Re: Ready market...

"money-losing online division"

Erm, not quite:

"...which includes Office 365 Home, Bing, and Xbox Live revenues. This group was up 18% in revenue over Q3 2013 driven by strong subscriptions for Office 365 Home – now at 4.4 million subscribers and up 1 million for the quarter. Bing search advertising revenue was also up 38%, and Xbox Live revenue was up 17% contributing to the strong increase for this business segment, and unlike the other Consumer lines, Gross Margin was also up 26%."

http://www.anandtech.com/show/7967/microsoft-q3-2014-financial-results

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Anonymous Coward

Re: Ready market...

Xbox loses money, and LOTS of it. It's kept afloat by Microsoft's Android patent protection racket. The numbers they use are all about percentage changes, nothing real to actually use... It's all about pulling the wool over shareholders eyes.

Inside Microsoft, they know that it's tide to say byebye to the embarrassemt that is the Xbotch.

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Re: Ready market...

@thevogon - increased revenue <> increased profit, or indeed, any profit at all.

"Gross margin up 26%" also does not necessarily indicate profit, it could be a change from big loss to smaller loss

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Re: Ready market...

Wrong. If margin goes UP by a percentage and they're fine to report it, it means it was positive in the first place.

10% margin up 26% is 12.6% now. -10% margin up 26% is negative 12.6% after going up.

Note that nobody uses these statements when margin is negative and drops further down.

And what you're describing is a change that would necessarily be expressed in percentage points, not raw percentage.

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It's not about the money

Of course, the money would be nice, but if you're trying to sell server operating systems, you need a good reference sample you can point at and say 'look, it scales'. Back in the 90's, I remember MS having a 'terraserver' install of MSSQL Server with satellite photos of the whole of the earth. This was back when 8TB was a lot of data. The point of it was to test and demonstrate the capabilities of server products rather than make money. I can totally see why they would keep hold of it for many reasons.

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Re: It's not about the money

Loss leaders generally don't cost a company many billions though. Bing may be one the biggest money losing technology in the history of business.

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Re: It's not about the money

Scaling Windows Server has nothing to do with Bing.

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Anonymous Coward

Re: It's not about the money

"I remember MS having a 'terraserver' install of MSSQL Server with satellite photos of the whole of the earth"

Now days Microsoft just wipes the floor with Midrange and UNIX system in 10TB database benchmarks instead:

http://www.tpc.org/tpch/results/tpch_perf_results.asp?resulttype=noncluster&version=2%&currencyID=0

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Re: It's not about the money

"Now days Microsoft just wipes the floor with Midrange and UNIX system in 10TB database benchmarks instead:

http://www.tpc.org/tpch/results/tpch_perf_results.asp?resulttype=noncluster&version=2%&currencyID=0"

Umm , a quick question - who exactly has a 10TB database that's not clustered? I can't think of many spheres in which that much data is happily serviced by a single machine. Warehousing maybe where a client program or a person needs to find what shelf an item is on now and then, but thats about it. Certainly not a high throughput enviroment such as finance where you could have tens of thousands of transactions a second. No single CPU system could manage that throughput.

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@Boltar Re: It's not about the money

Clustering SQL Server databases does NOT improve performance, only the active node is handling actual user requests. The other nodes are simply sat there keeping themselves "current" in case of a fail over

Secondly, no one runs a single CPU environment. Minimum CPU spec is a quad core for a very small barely used database box. Most enterprise level SQL Server installations are on 8 to 128 core servers.

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Re: It's not about the money

And that's why systems that handle that kind of database have a lot more then a single CPU. Those I've worked on had 16, but we were looking at either 32 or 64 on the new system (we were looking to refresh the hardware). And of course close to 1T of ram to keep it app happy.

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Re: @Boltar It's not about the money

"Clustering SQL Server databases does NOT improve performance, only the active node is handling actual user requests."

That tells you all you need to know about SQL Server then.

"Secondly, no one runs a single CPU environment. Minimum CPU spec is a quad core for a very small barely used database box. Most enterprise level SQL Server installations are on 8 to 128 core servers."

I hate to break the news to you - but it doesn't matter how many cores a CPU has , its still a single CPU. The cores all have to share the same data and address bus.

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Trollface

wait a second

Are we sure Bill's real reply wasn't "Who would take it, even for free?"

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Re: wait a second

It's the "We are going to have an overall gaming strategy" that would worry me if I were a shareholder. They haven't had one for the past decade?!?

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double wait a sec

>The hardware business, you're never going to have the kind of profitability you have in the pure software business,

He must be talking only about Microsoft because I am sure Apple would disagree with him. Their software really is a loss leader for the hardware for the most part. Bill forgets enterprise is not the only market.

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Re: double wait a sec

A little off-centre. Apple make high margin kit and sell it on their brand name. I'm sure Ferrari and co. also make decent profits on their car sales, as they can afford F1 teams and race series for their cars.

On the other hand, how much profit is there in a Dacia Duster etc. More than the average PC probably, but the bulk production cars are on much thinner margins, comparatively, and they have to sell them in bulk, like the rest of the PC industry.

It is the problem of perception. If Acer make a laptop of the same quality, with the same components as an Apple MacBook Pro and charge similar money, nobody will buy it, because "Windows PCs cost under 500 quid".

It is the same in Android tablet land, build a decent tablet and sell it for a reasonable price and nobody will buy it. Build it down to a price and / or sell it at cost and live off the ecosystem and people will buy it (Google Nexus and Amazon Kindle Fire). The problem is, only Google and Amazon earn on the ecosystem, so the other hardware makers have to make their money on the device sale, but how can you charge a "reasonable" amount for the hardware, when the ecosystem owners are undercutting you and getting fat off the ecosystem they are supposedly supporting? That is why Samsung and co are trying to get their own services loaded onto their devices.

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Re: double wait a sec

Last time I looked (most recent results) Microsoft still had higher margins than Apple.

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Re: double wait a sec

Both are still printing money but that could change for either one of them in the medium term. Still my point is Apple has shown you can make decent profits on the hardware if you have good enough hipster marketing.

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Re: double wait a sec

Plenty of companies make money from hardware.

Microsoft has made decent money of XBox. It's not just in the marketing but the eco-system and having the right product at the right price but also exclusivity: no one else makes Apple products. The eco-system provides enough glue for consumers to scratch most of their (content) itches. Microsoft competes with its partners with both Surface and now phones. It has a confusing eco-system: "why won't my desktop version of Word run on them? They've both got Windows after all…"

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Paris Hilton

Re: double wait a sec

It has a confusing eco-system: "why won't my desktop version of Word run on them? They've both got Windows after all…"

What version of Windows doesn't run desktop Word? Because I have an RT tablet and it does. Only thing it doesn't have is VBA which quite frankly is a good thing for most people. It's the same software and runs on desktop in RT.

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Anonymous Coward

The real reason MS will not sell Bing

No one would buy it - it is a dead product the second MS stops pumping tons of money into it and making it as default on every Windows computer.

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It would be embarrassing

Nobody would pay anything for it.

The next stock holders' meeting would be hostile: you spent HOW MUCH dicking around trying to play Google, then sold it off for nothing?

If there was just one rotten apple in the bag, that's OK, but MS have recently balled up pretty much everything they've touched.

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Recently ?

Microsoft has screwed up every major project for the past two decades.

The only thing that has kept Microsoft afloat is the fact that Windows+Office is everywhere and is the default choice. That tag team has made Microsoft its billions, nothing else.

And that is why Microsoft is desperate to get people to use Office365, because it knows that the future is going to see PCs relegated to developer/content creator tools. The masses have already ditched the PC for tablets, iPads and smartphones. Windows is going to lose the mass market, and that plus the no more Office licenses is going to put a serious dent in Microsoft's revenues. Maybe businesses will keep PCs for office drones, but the PC of 2050 will probably not be a tower. And this Bring Your Own nonsense is not helping Microsoft either.

So Microsoft is going to have to get its web services into top shape if it wants to survive. As usual though, it is pretty much screwing that up bit by bit as well.

But fear not, fanbois, Microsoft has plenty of cash to see itself through these difficult times. It will be able to screw up Windows 9, 10, 11 and all the way up to 25 if it wants before really getting into trouble.

Because it will screw up. It is much too used to having things work its way.

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Holmes

Re: Recently ?

"""The only thing that has kept Microsoft afloat is the fact that Windows+Office is everywhere and is the default choice. That tag team has made Microsoft its billions, nothing else."""

I would say it is more like the plethora of 3rd party software available for Windows only.

I said this here many times, I'm yet to know a single person who uses windows because they like it and not because they want to run game W, or applications X, Y & Z

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Anonymous Coward

Re: Recently ?

"Microsoft has screwed up every major project for the past two decades."

The Server OS and application businesses, the desktop OS and application businesses, developer tools, and especially Office 365, Lync, Exchange, Hyper-V and Azure all seem to be doing rather well just to pick a few holes in your point.

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Server OS & Desktop OS = Windows.

Application business = Office

I said those two lines were the money makers, no contest there.

Developer Tools = free, so no money from that

As for Office 365, it's not doing as well as Microsoft wants it to, and Azure is not the rush either.

I will grant you Exchange, but it's still a dog to run, and Hyper-V is making some people happy, no doubt there.

But I don't see that Microsoft is making billions on those last two.

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Alien

"Competitive"

From afar it looks as if Bing was a timely intervention in the sense that Google had some more competition.

If so, that intervention is more planning based than financial?

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Sell Bing???

Nope. It's Microsoft's "in" to what everyone does on the Interwebs. Just because it's a lousy search engine for us users doesn't mean that they don't get what they want. It justifies the web crawlers and the date it collects. It's the data that's important.

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Anyone remember...

... why MS came up with the XBox in the first place, and sank hundreds of millions into supporting it for the best part of a decade before it finally became profitable?

They were worried that Nintendo and Sony (and possibly even Sega) were poised to develop their consoles into more general-purpose machines, which might end up competing with Windows. They wanted a way to influence the console games market, to ensure that either (a) this didn't happen or (b) if it did, they would be in on it.

Fast forward a couple of decades, and now we know that the threat to Windows isn't coming from consoles - it's coming from phones. The XBox is now a strategic distraction. Oh, there's some synergy with "Games for Windows", but really - the console market is just not that important any more.

But Bing - that's the engine that underpins Cortana, Microsoft's bright new hope for phone interfaces. Without Bing, MS would be dead in mobile markets. Strategically, Bing is more important than it's ever been.

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Anonymous Coward

Re: Anyone remember...

"The XBox is now a strategic distraction."

It really isnt. Media streaming is rapidly becoming the main consumption method and there is some serious money in that business. Blue Ray and similar physical media will die out.

The Xbox One provides a pretty unique guesture and voice controlled media experience - and has hardware video encoding / decoding / picture in picture built in as well as features like HDMI pass through and HDMI control - all features that the PS4 for instance doesnt have. The Xbox One can therfore easily become a fully featured IP TV box and DVR.

Microsoft are well positioned to take a good chunk of the streaming media market.

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Anonymous Coward

Re: Anyone remember...

"The Xbox One provides a pretty unique guesture and voice controlled media experience"

Except the PS4 also does it, the only difference, Sony didn't feel the feature was worth bragging about. Yes you can do gesture and voice control on the PS4, but as with the Xbox One, it's a gimmick that wears thin very quickly.

" Blue Ray and similar physical media will die out."

Says the person that doesn't know it's Blu-Ray, not Blue Ray...

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Headmaster

Re: Anyone remember...

Says the person that doesn't know it's Blu-Ray, not Blue Ray...

Well, nearly right ... it's actually Blu-ray (with a small 'r') if you really want to be a pedant.

http://blu-raydisc.com/en/index.aspx

(Previously posted with the wrong URL (Ooops!) and I didn't notice in time to use the very splendid and worthwhile "Edit" facility.)

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Bing is a fine search engine. You might prefer Google but you are the same people saying Bing was shit 5 years ago. If the Bing of today were around 5 years ago you would have thought it amazing. There's nothing wrong with Bing. It delivers millions of relevant search results every day in a pleasing and easy to use and digest format. Doesn't matter what search engine I use, I generally find what i'm looking for in the first few results. I'm like most people in the world.....we all aren't searching for whatever esoteric stuff you guys seem to be looking for.

And really now.....don't you think two search engines competing with each other and pushing each other is better than one? Google is better because of Bing and Bing certainly has been motivated by Google.

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Not close yet

Yes, two search engines are better than one. And I'm not against bing just for being Microsoft. But I have used it recently and I don't know what simple things you are looking for but trying to find answers about Visual studio or Office is a joke still on Bing. It brings up the strangest references as opposed to Google that brings up useful information.

I want it to match Google for exactly the reason you state, it's just not close yet.

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In the USA (and to a lesser extent English speaking countries) maybe. It has a lot of local search capabilities there. But in mainland Europe, where people generally don't search in English, it is not that hot.

I use it from time to time and its results in English are generally on a par to Google, but in German it does a, generally, lousy job compared to Google.

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Bing was shit 5 years ago and it is still shit today. It'll probably still be shit 5 years from now. The fact that Bing gives you personally the results you need is irrelevant.

What is relevant ? Investments. Like this. And this. Google has been investing billions in datacenters for years now.

That is why we are seeing this kind of news. And this. Microsoft is playing catch-up, because Microsoft has decades to catch up with.

Even Facebook is getting into the act.

I don't know how much money Google has put into its worldwide datacentre architecture, but I do believe that, until Microsoft has at least equalled that amount, Bing will remain a 2nd-rate search service. Which is not to say that it can't be useful before that time.

But right now, Bing is shit.

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Anonymous Coward

"I don't know how much money Google has put into its worldwide datacentre architecture, but I do believe that, until Microsoft has at least equalled that amount, Bing will remain a 2nd-rate search service"

Microsoft already do outspend Google on data centre capital investment. For instance the article you quote says that Google are spending $600 million on their new Asian DataCentre. The equivalent figure for Microsoft is $9 billion: http://www.datacenterdynamics.com/focus/archive/2014/02/report-microsoft-build-us9bn-korea-data-center And that's after already opening 3 other new Asia Datacentres this year already!

Azure already has over a million servers that Bing can run on, so data centre capacity is unlikely to be an issue. Azure is doing significantly better in the IAAS marketplace than Google is, and Office 365 is wiping the floor with Google Apps in the important enterprise space so I expect to see more of the same...

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Last year I had to search Microsoft's own website for something. I decided to use Bing because Microsoft's own search engine should search its own website well. But I was not really finding what I needed. I decided to use Google and then I found the information I needed. Ever since I discovered that Microsoft's search engine does not search Microsoft's website well, I decided to never use Bing again. If your search is inferior on your own website, how much more inferior is it on the rest of the internet?

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Mushroom

Main thing I dislike about Bing is the way it handles video results. It gives me a grid of stills from the results. That's fine. Now I go to select one. Every time my mouse passes over one it starts playing a miniature version. A bit annoying. Then I click on one. Instead of taking me to the page that I want, Bing opens a stupid page still on the Bing site with the video in the centre and starts playing it there.

At this point my sequence is:

(1) Move mouse to page link at the bottom of the video.

(2) Click link which then opens in a new tab.

(3) Go back to first tab. Close it.

(4) Go back to new tab.

(5) Restart video because I've missed the first few seconds.

I'm fine with Bing except for this stupid, bone-headed, petty, monkey-wouldn't-write-it video process.

If I click on fucking YouTube, I want to go to YouTube. I'm crazy like that.

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Billy Boy..

..really is highlighting what we all have known for years...he's not a got a great vision other than copying

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Anonymous Coward

LIkely to go, it's a big loss-maker.

Ignore the massaged numbers, Xbox doesn't make money for Microsoft, it's loses LOTS of money.

http://www.gamesindustry.biz/articles/2013-11-07-huge-xbox-losses-hidden-by-patent-royalties-says-analyst

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Anonymous Coward

Re: LIkely to go, it's a big loss-maker.

Ignore the massaged numbers

here's some other massaged numbers to show the other ones are massaged wrongly

Seriously?

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Linux

Oh dear..

"The hardware business, you're never going to have the kind of profitability you have in the pure software business"

Exactly, once open source and other 'free' software is the norm, you aren't going to have anything LIKE the profit you can get from hardware.

I haven't spent a penny on Microsoft for 15 years.

Except metaphorically, when it happens every time I sit down at this computer.

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Re: Oh dear..

> Exactly, once open source and other 'free' software is the norm, you aren't going to have anything LIKE the profit you can get from hardware.

Oh, is it the Year of Linux on the Desktop again? Already?

Or is that next year? What, next year as well? How optimistic of you.

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Meh

@dogged - Re: Oh dear..

Itzman wrote :- "once open source and other 'free' software is the norm"

dogged replied :- "Oh, is it the Year of Linux on the Desktop again?"

Itznman said "free software" not "Linux". It will be the year of Linux on the desktop when only techies use desktops. As a techie, I even only use Windows in a VM under Linux these days.

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Joke

I didn't understand what Bing was

I had to google it.....

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