Microsoft's online services unit pares losses in Q2

Microsoft's online services unit pares losses in Q2

Summary: Sure, Microsoft lost a lot of money on Bing and other properties, but it's headed in the right direction.

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Don't look now, but Microsoft's online services division---a unit that historically has been a lock to lose about half a billion dollars a quarter---has improved operations and pared its losses.

In Microsoft's second quarter report, the headlines were Windows 8 and enterprise strength, but tucked away was the fact that the online services unit improved.

Also: Microsoft's Q2: Enterprise shines, Surface details scant

Specifically, Microsoft's online services unit lost $283 million in the second quarter, down from a loss of $459 million in the same quarter a year ago. Revenue for the division was $869 million, up from $784 million.

Sure, Microsoft lost a lot of money on Bing and other properties, but it's headed in the right direction.

For its part, Microsoft credited revenue per search improvements.

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Topics: Microsoft, Data Centers

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12 comments
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  • Microsoft lost a lot of money on Bing and other properties, but it's headed

    It's headed I very right direction. Bing is no my number one search engine, gives grate search results and looks awesome, I'm loving it! And there is awesome Outlook, simply, great looking and very straight forward. Keep going great job Microsoft.
    Mr.SV
    • Bing is a disaster. Maybe Microsoft should sell it.

      Microsoft's online services will fail.

      The reason is that Microsoft has already failed in the smartphone market. Nobody is buying Windows Phones.

      Those who control the two dominant smartphone platforms, Google and Apple, will dominate online services, as they own the gateway to get to those services (Google is ahead of Apple).

      Bing and other Microsoft services cannot work on their own. Microsoft should either sell them, or team with others to form an 'alliance of the losers'. Instead of trying to sell Samsung its failed Windows Phone, Microsoft should instead offer its online services, in conjunction with an existing open-source phone platform, such as Tizen, Ubuntu or Firefox OS, and offer that to Samsung and LG.
      Vbitrate
      • existing open-source phone platform

        Nice joke, Ubuntu, Firefox OS, Tizen... for now they just crawling in the mud. Rest of your post I even comment, just laugh ;)
        Mr.SV
      • Bing beats google hands down.

        http://www.zdnet.com/microsofts-bing-it-on-challenge-beats-googles-results-21-7000003981/
        Johnny Vegas
      • What have you been smoking?

        sorry but all is read was.... troll troll troll troll troll troll troll troll troll troll troll troll... I'm not even going to bother with anythin more....
        Skunkwurx
      • Shame the facts indicate otherwise

        Windows Phone 8 sales while nowhere near the volume of Android or iPhone (yet) were better than expected over the Xmas period ... and that was before the phone was available across all carriers and all countries. While it's too early to proclaim Windows Phone complete win, it's also WAY too early to declare it a complete fail. It's DEFINITELY heading in the right direction and Nokia's recent forays into China and LATAM may well result in significant growth of the WinPhone platform in the coming year.

        While mobile is indeed a growing part of online services marketplace, mobile website and service traffic is still a small fraction of the overall web & internet traffic.

        Bing and other Microsoft services AREN'T working alone. They're powering the search for a variety of large networks including Facebook & Yahoo.

        What you don't seem to realize about Microsoft is that their patience and tenacity is, from competitors' perspectives, terrifying.

        10-12 years ago, many people were making statements like yours about Microsoft's forays into server OS', directory services, email servers, web servers, database servers, systems management software, etc., proclaiming that Microsoft was doomed because it just didn't have the tech to move into the server room.

        15-20 years ago, many like you were proclaiming that Microsoft should get out of the word processing and spreadsheet software markets because their products couldn't compete with WordPerfect, AmiPro, Quattro, Clipper, dBase, etc.

        Many have underestimated Microsoft's prowess and few who did exist today.
        bitcrazed
      • Maybe you should call Microsoft up and offer your services?

        Since you look to have all the answers, maybe you should advize them.
        DontUseGoogleAtAll!
      • An effective way to spot a troll is when the post starts with

        "Microsoft's online services will fail."

        that's gotta be a troll
        Master Wayne
        • Jack of all trades,

          Master of none.
          RickLively
  • Bing needs to expand in other countries

    Bing results are better than its competitors in US and selected European countries, but Bing's coverage in other countries is way behind the competition. I don't exactly understand why MS is not aggressive in rolling out its Online services to the entire world... sure it does have the technology now...may be its the financials or logistics or something else that slows down the aggressive worldwide roll out...
    Owlll1net
    • Good Point!

      As someone that hasn't traveled abroad in a while, you make a great point. Also, look at their Xbox - they are doing very well in the USA and Uk, but could use some more apps for the overseas Xlive users.
      Zappykins
  • Competition and choice

    As long as I have multiple companies hustle for my attention and money...I can only be a winner. You get value. I think that android and apple have become too comfortable. A third party is sorely needed for some positive disruption.
    rgor@...