walkman - 12:31 am on Jul 16, 2011 (gmt 0)

Based on Bing's performance over the past decade, and especially over the past two years, we continue to think it's unlikely that Microsoft's online division will ever make money again. We also have to believe that the $3 billion Microsoft is burning every year on Bing could be better spent trying to compete with Apple and Google's Android on tablets and phones (not to mention Macs and Chrome). Why? Because the stakes in the latter battle are very high.

^^
Since you're quoting the infamous Henry Blodget, MSFT is much smarter than him. They already have Android beaten, or maybe they don't want to beat it since it's going to make them $1Billion+ in profit each year.

Since Microsoft has the rights to several patents related to technology used in Android, it has been able to turn Android into a huge revenue generating business by entering into patent licensing agreements with other companies which produce Android devices. [3] Microsoft recently entered a patent licensing agreements with several manufacturers including HTC, General Dynamics, Wistron and Onkyo under which they will pay it $5-$10 for every Android device that they ship. With 500,000 devices a day, this implies around $1 billion in value if it received a $5 fee for each Android device. Current negotiations with Samsung, the top Android device manufacturer, could land Microsoft an additional $10-$15 for every Android device activated by Samsung. [4] [blogs.forbes.com...]

Both Google and MSFT buy traffic because people are used to "good enough results" and stay there. Like Google did with AOL or Myspace or Mozilla. Just Microsoft sucks at sucking dollars out of SERPS for now