The New York Times ran a recent article on Microsoft regarding its search engine being regarded as an underdog. Despite being an interesting article, it also raised some interesting questions. A few being:
- How long (in years) before Bing breaks even?
- What currently defines Bing and what may define its success?
- How likely is it that investors will oust Microsoft CEO Steve Ballmer because of the failed (and money losing) Online Services and what would be the outcome?
- What are the features and tools of Bing that may break through Goole usage and cause it to decline?
- What would happen if Bing peaks at 25 percent?
How Long is ‘Long Term’.
Having launched two years ago, Bing, has made a respectable gain within the search engine market during that time. Commanding 14.4 percent of search query volume in the US (per comScore). This however has mostly come at the expense of other search providers: AOL, Ask and Yahoo. The search engine has not been able to erode Google’s dominant market share of 65.5 percent. It has however managed to make Google adapt in several ways, especially to the integration of social signals.
Microsoft’s head of search has said, “To break through, we have to change the game. But this is a long-term journey.” This is true but how long is that? 10, 15 or even 20 years? It is probable to say the Bing must break or otherwise demonstrate real success before it hits ten years old. However if it doesn’t what would be the implications? Shut it down – not very likely.
Bing doesn’t match Googles earlier growth.
After its initial four years of search engine services, Google was already a leading search engine among a field of around 10. After a following year, Google was dominant with over 50 percent of the worlds search engine queries.
Admittedly the search engine market today is a far cry from that of a decade ago, but matched with Google early growth and trajectory, Bing is way off.
With wide anticipation that Bing will pass its partner search engine, Yahoo within the next year, people have to ask since Bing is providing Yahoo’s organic and paid search is the achievement something to be proud of? If Bing’s growth comes at the expense of Yahoo, it is then mostly counterproductive, because Bing itself is damaging its Bing-Powered sites.
Seeking the Wedge
From this point it is a challenge to imagine what Bing might bring in features or specific capabilities that would improve its situation as dramatically as required for a larger market share. Bing Travel has been mentioned as a differentiator, but with Google beginning to build its own travel service (following its ITA acquisition) that doesn’t seem to be the way forward. The ‘strategic verticals’ of Bing between travel, local, health, shopping etc have still to yield the benefits and usage growth that Microsoft was hoping for.
Even with Bing releasing new and innovative products ( iPad app, facebook integration etc) none of these products have had the stopping power to slow Google. With Google+ recent release the advantage Bing has with its ‘social search’ through its relationship with Facebook will be diminished even further.
Android Tax and Antitrust affect
Recently Microsoft has been exhorting the US and EU to impose restrictions on Google due to the alleged anti-competitive practices. However some of these practices (such as sending traffic to its own properties) are used just as readily by Bing and Yahoo, therefore making any potential restrictions around that practice equally problematic for Bing.
The outcomes of active antitrust investigations across Europe and within the US are uncertain but are unlikely to result in any real upheaval of the current market balance and share. However it is also unlikely that Google will emerge damage free from the allegations.
At the same time as all this, Microsoft has been trying with limited success to get mobile hardware producers (HTC, Samsung etc) to pay licensing fees on Android handsets in deference of Microsoft patents used within the handsets. This is Microsoft’s attempt to generate revenue (potentially billions) and eliminate the perceived gap between Android with its free software and Microsoft’s priced system.
The success of Android and the dominance of the iPhone have help increase Google search dominance beyond its share on the PC. And though not an apparent part of either the European or American antitrust investigations I see Google’s control over Android being potentially vulnerable in the long term.
Upping the Intensity
Bing’s high intensity effort is paying off and the search engines market share is increasing however not at a level that Microsoft needs if it is ever going to truly challenge Google over a ‘long term time period’. Bing will need to continue to develop novel tools and features and improvement will need to be continued on current features (Improve Bing News to rival Google News etc)
Microsoft will also need to continue to purchase other internet systems, but at increased frequency and at a much reduced cost (Skype was a whopping $8.5 billion). Microsoft must recognise sensible marketing purchase and aim to beat Google during bidding to prevent losing out to Google (The Dealmap went to Google, Microsoft should have upped the bid).
Bing also needs to focus on developing its search system to be usable by both ends of the user spectrum, from the early adopter’s right through to new users. It must be appealing to all user groups to ensure growth in its market share and managing this is very difficult.
