Microsoft has burned more than $5 billion on its Web operations in the last four years, and it shows no signs of slowing down.
In an interview with Reuters, Microsoft online boss Yusuf Mehdi says the company will turn it around by gaining scale through the Yahoo deal.
“If we grow share, we will grow our way into profitability, and we have confidence we can do that.”
Once the Yahoo deal is closed, Microsoft will control 30% of the search market. Yusuf says at 30% of search, the company hits a magic number for advertisers who will all flock to the company. From there, the company will start making money.
“There’s no question we intend to make a profit,” says Yusuf. Later he says, “Ultimately we want to be a major player at scale,” but “we’re still outmanned and outgunned by Google.”