Microsoft Bets the Farm on Bing

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Microsoft has essentially said it's betting the farm on Internet search and Bing. But it may be that its real target isn't Google, but instead Yahoo.

The idea that Microsoft could catch Google in search is a pipe dream, even if Microsoft has said that it's willing to spend up to $11 billion on search in the next five years. Google has too much of a head start, as well as the ability and willingness to spend as much money as possible to make sure it stays on top.

But Microsoft doesn't need to be number one in search in order to be successful. If the company could leapfrog Yahoo and become number 2, there's the possibility that its search investment may pay off.

Steve Ballmer recently said that he's open to a "partnership" with Yahoo, but didn't define exactly that that meant. However, he made it clear that Microsoft is no longer interested in buying the company. According to the Guardian, he recently said in a question-and-answer session at the Cannes Lions International Advertising Festival:

"We have no interest in acquiring Yahoo. What we have said is that we will continue to remain open to a partnership with Yahoo."

The reason he's not interested in Yahoo, I think, is that he believes that Microsoft can grab Yahoo's market search share for less money than it would require to buy the company.

This story, "Microsoft Bets the Farm on Bing" was originally published by Computerworld.

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