In less than a year, Microsoft CEO Steve Ballmer will retire. Former Nokia man Stephen Elop is hotly tipped to take the top job, and Elop is said to have a priority in common with Microsoft co-founder Paul Allen: both think that the company should ditch Bing.
Why abandon what is currently the world’s second most successful search engine? The reason is simple: Microsoft badly needs to streamline its operations. Rumor has it that Xbox is also likely to go if Microsoft slims down to concentrate on its core business. Search has proved an expensive sideline – Bing is only doing so well because it is constantly pouring resources into the fight with Google. Selling up could be a very practical decision, but there is a catch.
This catch is rather a big one. Over the last few years, Microsoft has interwoven its software products more and more closely with Bing to the point where its most user-friendly off-the-shelf models will not function without it. This puts Microsoft in the awkward position where, if it made the sale, it would then need to license Bing back from the buyer to keep it as part of the Windows machine package. It would need to find a buyer amenable to such a contract and likely to respect it over the long term.
Given that Bing would be likely to cost several billion dollars, the number of possible buyers is quite small. Monopolies law would probably prevent Google from stepping in; ironically, Microsoft itself pushed for the law to be interpreted in this way in order to prevent Google from partnering with Yahoo in 2012. This leaves Facebook as the company in the strongest financial position to act, but Facebook previously turned down a related suggestion from Microsoft. It remains to be seen if the improvements that have since been made to Bing will make it a more appealing option now.
Of the other possible contenders, the most interesting possibility is Yahoo. Making the purchase could strain the smaller company’s finances; however, Yahoo does have assets outside its core area, the sale of which might make the purchase possible, and it would give Yahoo control over 35% of the search market and put it in a very powerful position. It would also get Yahoo out of what has now become an uncomfortable partnership with Microsoft.
