Here are a couple of simple facts: Microsoft’s online services business lost $466 million during the last financial quarter, and most research firms put Google’s share of the search market at least 45 percentage points above Yahoo’s. Still, Microsoft believes Bing can be competitive and profitable.
Yusuf Mehdi, the senior vice president of Microsoft’s online audience business, talked to Reuters yesterday, and expressed a mixture of confidence and optimism on several fronts. Much of that stemmed from his faith in a certain not-quite-cemented partnership.
"As soon as we close and implement the Yahoo deal, we have achieved a milestone: for advertisers, we are a credible No. 2," Mehdi said.
Later, Mehdi continued, "There’s no question we intend to make a profit. . . . Clearly there’s a huge return in the search marketplace that can more than make up the investments we’ve put in to this point."
Bing (and perhaps Yahoo) fans should be happy to hear all this. It doesn’t sound like Microsoft’s set its sights unrealistically high (note the "No. 2" comment), and at the same time, the company sees a way to make money off what’s generally been a losing proposition to date.
Now, of course, Microsoft and Yahoo just need to get regulators to approve their deal.