Microsoft (MSFT) Should Sell Bing -NYTimes
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Price: $365.46 --0%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 1%
Revenue Growth %: +14.7%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 1%
Revenue Growth %: +14.7%
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Microsoft (Nasdaq: MSFT) doesn't need to search too hard for a way to bring more value for it's investors.
In an opinion piece over the weekend, a New York Times writer made the case for a divestiture of Bing.
Though the search service has grown markedly since launch, Bing has been bleeding cash, and hasn't made too much of a dent in Google's (Nasdaq: GOOG) massive search-market share. Bing and sites used to power Yahoo! (Nasdaq: YHOO) have only a 27 percent market share in the U.S., less than half of what Google boasts.
Bing lost about $2.6 billion for Microsoft last year, about 10 percent of potential profit. Despite the losses, the Redmond, WA-based tech giant keeps pouring money into Bing, saying the service is making other offerings, like mobile devices and gaming, more appealing. The NYTimes believes there is little evidence to-date backing up that claim.
Bing might also be better served as part of Facebook or even Apple (Nasdaq: AAPL). Facebook already uses Bing for searches, and Apple may be looking to solidify it's online presence, as evidenced in a potential bid for Hulu. A sale would not only stop the losses, but also bring in a nice payday for Microsoft.
How much is Bing worth, then? NYTimes notes Microsoft's online services unit brought in $2.5 billion in sales last year. Using a multiple derived from Google's valuation, which currently trades for about 6x annual sales, the unit may fetch as much as $11 billion.
Shares of Microsoft are about 0.2 percent lower on the session.
In an opinion piece over the weekend, a New York Times writer made the case for a divestiture of Bing.
Though the search service has grown markedly since launch, Bing has been bleeding cash, and hasn't made too much of a dent in Google's (Nasdaq: GOOG) massive search-market share. Bing and sites used to power Yahoo! (Nasdaq: YHOO) have only a 27 percent market share in the U.S., less than half of what Google boasts.
Bing lost about $2.6 billion for Microsoft last year, about 10 percent of potential profit. Despite the losses, the Redmond, WA-based tech giant keeps pouring money into Bing, saying the service is making other offerings, like mobile devices and gaming, more appealing. The NYTimes believes there is little evidence to-date backing up that claim.
Bing might also be better served as part of Facebook or even Apple (Nasdaq: AAPL). Facebook already uses Bing for searches, and Apple may be looking to solidify it's online presence, as evidenced in a potential bid for Hulu. A sale would not only stop the losses, but also bring in a nice payday for Microsoft.
How much is Bing worth, then? NYTimes notes Microsoft's online services unit brought in $2.5 billion in sales last year. Using a multiple derived from Google's valuation, which currently trades for about 6x annual sales, the unit may fetch as much as $11 billion.
Shares of Microsoft are about 0.2 percent lower on the session.
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