Microsoft’s Online Business29% of U.S. web searches
Over 5 billion per month
Yahoo! partnership
Cortana
Siri
The Numbers
-3
-2
-1
0
1
2
3
4
5
6
2010 2011 2012 2013
Revenue vs. Expenses (in billions)Source: Microsoft.com (FY10-13 Earnings Statements, Online Services Division)
Revenue Expenses Operating Income
History
1995: MSN.com launches
1998: MSN Search
introduced
2005: MSN builds its own web
index
2006: Windows
Live Search replaces
MSN
2009: Microsoft launches
Bing
2009: Bing partners
with Yahoo!
2013: Bing partners
with Apple on Siri
Global Market Share
Google Baidu Bing Yahoo Other
Source: NetMarketShare, PC Search Engine Statistics, October 2014
The Situation TodayThe only English internet index to rival Google’s
Fierce competition
Negative operating income
Microsoft knows they won’t beat Google at traditional web search.
The Strategy for Tomorrow (“What’s Hot”)Today’s search engines are passive
Next-generation will be active
Build knowledge, not indexes
Enrich other products with dataOutlook
Windows
Visual Studio
Story“The next generation of the technology industry will be built on information and machine learning.”
“Google makes money from ‘lost,’ not ‘found.’”
“When I get an email, I shouldn’t have to ask what the Internet already knows.”
Buy or Sell?Unimpressive numbers
Great visionDoes not imply great execution
Online services are critical for long-term success
Buy low, sell high…