Microsoft Corporation (NASDAQ:MSFT)’s Bing Attains Profitability
Once a money hold, Microsoft Corporation (NASDAQ:MSFT)’s Bing is starting to give back what it consumed as the search business turns profitable. However, there is still a long way for Microsoft to go in matching the success of its search archrival Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL). Microsoft recorded search revenues of more than $1 billion in its F1Q2016 courtesy of Bing.
Microsoft Corporation (NASDAQ:MSFT) pumped money into Bing and waited patiently to see the search business grow and become profitable. From as far back as 2009 when Bing debuted, it has mostly been a money hole, despite standing as the second most popular Internet search engine after Google. However, in its latest quarterly update, Microsoft announced that Bing had turned profitable with search revenue surpassing $1 billion.
Extracting profits from Bing going forward
According to Microsoft’s CFO Amy Hood, achieving profitability at Bing was nothing short of a milestone for Microsoft, but that is only the beginning. Hood disclosed that Microsoft remains committed to making its search business profitable going forward, at least throughout the balance of fiscal year 2016.
As Microsoft worked to build Bing up, the company invested a substantial amount of its wealth in setting up data centers, hiring talent and marketing its search business. With Google’s comfortable leadership in the Internet search space, the Bing team had to work harder to at least clip away some business from its main rival. It didn’t come easy, but Microsoft is elated at the latest progress from its search division and the team is inspired to pursue more profits.
In search of new growth
With its core legacy software business cooling, Microsoft Corporation (NASDAQ:MSFT) is looking for new growth in multiple areas, including Search and Cloud. Already Search is hitting profitability and the company sees the future in the business as more promising. Microsoft’s Azure cloud also grew exponentially in the latest quarter. Azure revenue more than doubled in F1Q2016.
Microsoft’s overall first quarter revenue and EPS was $21.7 billion and $0.67, respectively, both on an adjusted basis. Wall Street was looking for revenue of $21.03 billion and EPS of $0.59 in the quarter.
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