Stephen Elop, one of the candidates in the running to be Microsoft’s next CEO, is said to be considering selling the company’s Bing search business and Xbox video game business if he gets the job, according to Bloomberg.
The Bloomberg report, which cites a few sources with knowledge of Elop’s thinking, also says Elop would focus heavily on Microsoft Office, finally bringing it to iPhones, iPads, and Android devices as a way to lure people into the Windows ecosystem. Elop used to be in charge of Microsoft’s Office business, so that makes sense.
Elop was the CEO of Nokia, but he stepped down after Microsoft announced it would buy Nokia’s mobile devices business for $US7.2 billion in September. Once the deal goes through, Elop will head up a team at Microsoft that manages mobile devices like smartphones and tablets that Microsoft will make. (Assuming he doesn’t get the CEO gig first, of course.)
The Bing selloff makes sense.
Microsoft’s attempt to take on Google in search was risky at first, and it hasn’t made much headwind. Bing only has 17% of the search engine market share in the U.S., compared to Google’s 67%, according to the latest ComScore numbers. Microsoft also loses a lot of money from its online services division, which includes Bing. Since 2005, the division has lost about $US11 billion. One could argue Microsoft is just throwing money down a rat hole with its Bing business. Wall Street has been howling for Microsoft to dump bing for some time now.
Microsoft’s current CEO calls all that lost cash an investment. In 2012 he said Bing is more than just a search engine, but a way to gather data for important technologies that will shape our future like big data and machine learning. Ballmer doesn’t necessarily see Bing as a regular search engine anymore. Instead, Bing will integrate deeply into Microsoft products like the Xbox, Surface, and Windows Phones.
But based on the Bloomberg report, it seems like Elop is looking at the numbers behind Bing and those numbers do not look good:
Spinning off the Xbox business makes less sense. As Microsoft repositions itself as a devices and services company, it likes to tout its popular video game console business as an example of how it can make great hardware people love to use. Despite its financials, Microsoft’s Xbox business is one of the company’s strongest, most beloved brands and proof that it can make hardware integrated with services people want.
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