Microsoft Considering Marrying Windows 8.1 Update with Bing

Amid buzz that Microsoft (MSFT) will cut the license fee for its impending Windows 8.1 update by 70 percent for OEMs, there’s new chatter that the vendor is mulling an experiment to bundle the OS with Bing, some apps and services and either give it away for free or feature it as an inexpensive upgrade for Windows 7 users.

Windows 8.1 already includes a Bing SmartSearch component but, according to multiple reports (which may stem from one key source) Microsoft is prepping a new version of the OS upgrade dubbed Windows 8.1 with Bing. The vendor recently said it’s targeting this spring as a launch date for the Windows 8.1 upgrade but it’s uncertain when, or if, the Bing-equipped version might show up. Perhaps the vendor will reveal more details at the upcoming Build conference in April.

With Microsoft said to be considering at some point selling Windows Phone and Windows RT free to device makers, it appears it’s tussling with how to use the operating system platforms to drive traffic to make money from its services.

As ZDNet suggests, could this become its new revenue model where the OS is served up free along with a smorgasbord of service options and incentives? Is Microsoft’s takeaway from the slow uptake of Windows 8—its 200 million licenses sold in 15 months still lags Windows 7 by a good margin—that it needs to find a new financial model? Would Microsoft go so far as to charge for apps and services currently offered free as part of an integrated OS if the platform itself is offered for free? That sounds a bit too Google-like (GOOG) for now, but down the road …

Not to take this line of thinking too far, but new Microsoft chief Satya Nadella already has alluded to something along these lines, saying recently the company “had the formula figured out, and it was all about optimizing, in its various constituent parts, the formula. Now it is about discovering the new formula.”

It’s not much of a leap to conclude Nadella is referencing Microsoft’s competitive position with cloud, mobile and the future of its traditional bell ringers Windows and productivity software. Perhaps monetizing services packaged with a free OS is included somewhere in those plans.