David Prosser: There's no beating Google but Bing may still bring in the bling
Friday 29 May 2009
Outlook Here's a wager for anyone at Microsoft who cares to take it up. In a year's time people will still be Googling when they're looking for information on the internet – and they won't be Binging, however much Microsoft throws at advertising its relaunched search engine (rumour has it that $100m has been put aside for marketing).
Hands up if you even knew Microsoft's current search engine was called Live Search? Can't see many of you out there. And keep your hands up if you've been using Live Search regularly, let alone more frequently than Google. Almost no one left. That lack of business is why Microsoft is relaunching Live Search as Bing – the geeky wags reckon it stands for "but it's not Google" – as its all-new-and-improved search engine. And as with any initiative in this marketplace, the launch will be seen as an attempt to challenge the all-powerful Google. Microsoft itself makes various claims about the advantages of Bing – more targeted results and so on – and isn't shy about saying it wants to take on the monopoly player.
In its heart of hearts, however, Microsoft must know it cannot succeed. Bing may turn out to be better than Google – these things are often a matter of taste – but it's not going to be that much better. Google has seen off plenty of threats already, and while Microsoft has deep pockets, so does its target.
So what is Steve Ballmer, the Microsoft boss, up to? He's too smart to be spending that kind of cash on a hopeless endeavour. The answer is that while Mr Ballmer will know Google is too far ahead to be caught except in the very long term, even incremental improvements in Microsoft's search engine business will net handsome rewards.
In the US alone this year, the ad revenue from search is expected to come in at close to $16bn. Live Search has an 8 per cent share of the search query market right now so Microsoft is missing out on almost all of that money – indeed, its online advertising business made a loss in the last quarter.
Moreover, if Bing really can propel Microsoft's market share upwards, the company's sales executives will find themselves pushing at some open doors. Advertisers are increasingly worried about Google's dominance of the market, which has already seen it cut back on discounts for agencies, for example, and will welcome any credible rival with open arms. They're dying to spend money with someone other than Google if they'll get results. Mr Ballmer knows this very well. It is exactly the reason he was prepared to offer Yahoo shareholders $45bn last year for their company. Google knows it too. That's why it did everything possible – and ultimately succeeded – to nix the deal.
Indeed, Bing could be seen as plan B for Microsoft after it missed out on Yahoo. And maybe it should have been plan A all along. Even with a $100m marketing spend, plus whatever it has cost to develop Bing, this is a massively cheaper way to attempt to compete in search.
The early signs are good. The cognoscenti on the blogs reckon Bing might be in with a chance of overhauling Yahoo's 20 per cent share of the search market (Google, by the way, is on 64 per cent). Those who take an interest in such matters are likely to be early adopters of such initiatives and therefore quicker to switch, but a warm welcome is still a warm welcome.
Here in the UK, we must wait a little longer for Bing, which launches today in the US but won't have a British version fully up and running for another six months or so. Still, the man running the UK end of the project, Ashley Highfield, knows a thing or two about what makes monopoly players tick – and how one might go about challenging some of their unfair advantages. He's a former big cheese at the BBC.
We should wish Mr Highfield and his bosses in Seattle luck. One of Google's many triumphs is its fantastically positive image. But monopoly players are never good news for customers in the long run.
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