Microsoft may be about to bury one of its biggest quarterly embarrassments.
Kara Swisher at All Things D reports CEO Steve Ballmer is going announce a big reorganization of the company this Thursday.
As part of the reorg, Microsoft’s earnings reports could be totally different. Swisher says Ballmer is considering mashing up the reporting of the company’s divisions.
This would allow Microsoft to hide the atrocious performance of its Online Services Division, which is made up of Bing, MSN, and other pieces.
Every quarter Microsoft reports earnings, we run a chart showing the giant losses from OSD.
Last quarter, for instance, Microsoft’s online division had an operating income loss of $262 million. And that’s a big improvement!
Since the first quarter of 2005, Microsoft’s online division has lost $10.9 billion.
Read that again. $10.9 billion. There’s probably never been another company in history that has lost that much money online.
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%.
Since it’s now clear that Bing isn’t going to defeat Google, Microsoft is changing the conversation around Bing.
It says that thinking about Bing as a foil to Google is narrow minded.
CEO Steve Ballmer recently defended Bing saying that it gives Microsoft an advantage in big data and machine learning. He says this technology is being used across Microsoft in various business groups.
Ballmer has a point. Look at Apple’s biggest product screw-up in as long as we can remember: Apple Maps. Apple’s lack of data and search expertise make Maps a terrible experience relative to Google Maps.
Microsoft has also been talking about Bing integration in Windows 8. It allows a user to seamlessly search the computer, apps, or the web.
The integration of Bing across divisions is the exact sort of thing Ballmer wants to amplify in his reorg.
Ballmer’s plan, according to various reports, is to realign the company around the notion that it’s a devices and services company.
Devices means hardware Microsoft builds, as well as support for Microsoft’s hardware partners. Services is more like software and cloud services.
Bing would likely be considered a “service” in the new organisation, and as such, Ballmer could tuck its losses into another group like Servers & Tools, or Windows.
While those groups would appear to earn less money, it means writers and analysts won’t be able to kick Microsoft for losing hundreds of millions every quarter through Bing.
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