Microsoft May Trade Bing in for Additional Facebook Shares

Bing logoMicrosoft may be thinking about trading its Bing search with Facebook for more of the social network's shares once FB goes public.

According to Rick Sherlund of Nomura Equity Research, who has a Buy rating on Microsoft and a $37 price target, Bing is an unnecessary burden to Microsoft at this point.

"Microsoft loses $2.5 billion a year with Bing, and that's a 7-percentage-point hit to operating margin, so it's huge," said Sherlund. "Investors have not been a fan of that line of business for a long time. They just don't see the rewards."

Sherlund added that Microsoft's decision to unload Bing onto Facebook would make sense because Microsoft really has no business being in search to begin with. Originally, the company probably did this to give Google some competition, but surrendering Bing to Facebook would give Google more of a run for its money.

Instead of search, Sherlund believed that Microsoft should focus on its strengths, which are operating systems, its gaming platform Xbox 360 and Xbox Live, and mobile touch-screen technologies.

Breaking up with Bing and gaining Facebook shares could also allow Microsoft to monetize its services like Xbox Live through Facebook without all the additional headaches associated with owning it.

"In order for Microsoft to have monetization through search or display ads, they could just turn over the work, the costs to Facebook, and get it back in TAC [traffic acquisition costs]," said Sherlund. "They would still get 80 percent to 90 percent of the revenue returned through TAC, they would end up getting most of the revenue anyway."

The advantages are there, and Sherlund isn't the first to recognize them. According to Forbes, a new e-book for Amazon Kindle called "The Facebook IPO Pitch," which was written by an anonymous author claiming to run an internet advertising and marketing firm, made the same claims.

Back in July, The New York Times wondered why Microsoft didn't hand Bing over to Facebook as well. More recently, CNBC reporter Gary Kaminsky brought the idea up and spurred more conversation on the topic.

If Microsoft were to give Bing up to Facebook in exchange for additional Facebook shares, it would have to be after the social network's initial public offering (IPO). Microsoft could possibly get 1 to 2 percent of Facebook's approximate valuation, which is $75 billion to $100 billion.

Source: DailyTech

Tags: Bing, Facebook, Microsoft

Comments
Add comment

Your name:
Sign in with:
or
Your comment:


Enter code:

E-mail (not required)
E-mail will not be disclosed to the third party


Last news

 
You can use a security key instead of having a code sent to your phone
 
Adobe says that the AI can now achieve the intended result in seconds
 
A new security protocol replacing the aging WPA2
 
Download and install at your own risk, of course
 
More iPhone parts likely to be produced by Samsung
 
Starting on Friday, video views on YouTube will start to be counted by the Official Charts Company
 
LG has already announced two new V-series members in 2018
 
The method is blocked and the hack doesn’t work, it adds
The Samsung Galaxy A5 (2017) Review
The evolution of the successful smartphone, now with a waterproof body and USB Type-C
February 7, 2017 /
Samsung Galaxy TabPro S - a tablet with the Windows-keyboard
The first Windows-tablet with the 12-inch display Super AMOLED
June 7, 2016 /
Keyboards for iOS
Ten iOS keyboards review
July 18, 2015 /
Samsung E1200 Mobile Phone Review
A cheap phone with a good screen
March 8, 2015 / 4
Creative Sound Blaster Z sound card review
Good sound for those who are not satisfied with the onboard solution
September 25, 2014 / 2
Samsung Galaxy Gear: Smartwatch at High Price
The first smartwatch from Samsung - almost a smartphone with a small body
December 19, 2013 /
 
 

News Archive

 
 
SuMoTuWeThFrSa
    123
45678910
11121314151617
18192021222324
252627282930 




Poll

Do you use microSD card with your phone?
or leave your own version in comments (11)