Microsoft Bing is now nearly the number 2 search site, but continues to bleed cash

By Preston Gralla

The latest figures from Comscore show that Microsoft is essentially in a dead heat with Yahoo as the second most popular search site, with Microsoft at 15%, and Yahoo at 15.1%. That's the good news. The bad news is that Bing continues to bleed cash.

The numbers show that Google is still dominant, with 65.4% of the market, and shows no sign of ever giving up that lead.

If anything, the numbers may downplay Google's true dominance, because they don't take into account searches done from phones or tablets. Given the Android ubuiqity on smartphones, the iPhone's popularity and the iPad tablet dominance (they use Google as a default search engine), Google likely has a higher share of the total search market than the 65.4% shows.

Still, Microsoft must be pleased that its numbers are up from last year, when it had under 12% market share. Yahoo was at 16% a year ago, and Google was at 66%.

Bing powers Yahoo search, so even though it is making headway against Yahoo, the combined numbers of Bing and Yahoo is little changed compared to a year ago. Little market share was taken away from Google in the past year.

That gain against Yahoo and no gain against Google came at significant financial cost to Microsoft. GeekWire reports that Microsoft's Online Services Division lost $494 million last quarter. A year ago, it lost $558 million for the quarter. Slightly lower losses compared to a year ago must be cold comfort for Microsoft.

Still, Microsoft has to spend that money; it can't cede the search market to Google. Expect continuing losses of multiple hundreds of millions of dollars per quarter into the forseeable future. For that investment, Microsoft is hoping not just to become the number two search engine, but eventually to gain ground against Google.

Copyright © 2011 IDG Communications, Inc.

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