Bing gives credibility to MS

In late May, Microsoft unveiled Bing, its new Internet search engine, in front of an audience of skeptics: technology executives and other digerati who had gathered near San Diego for an industry conference.

To that crowd, Microsoft’s efforts to take on Google and Yahoo in the search business had become something of a laughingstock, and for good reason. Microsoft’s repeated efforts to build a credible search engine had fallen flat, and the company’s market share was near its low.

Six weeks later, Bing has earned Microsoft something the company’s search efforts have lacked: respect.

As a result, analysts say, the once-dubious prospect that Microsoft could shake up the dynamics of the search business, which is worth $12 billion in the United States alone, has become just a bit more likely.

With Google and others trying to challenge Microsoft’s traditional software business, Steven A Ballmer, the chief executive, last year bid a staggering $47.5 billion in an unsuccessful effort to take over Yahoo, the No 2 player in search. That defeat forced Microsoft to redouble its homegrown efforts, leading to the release of Bing. The new service received favourable write-ups from influential reviewers and technology bloggers for the quality of its results, as well as its features and design. Studies showed many people preferred its look and feel to Google’s. Marketing experts said the Bing brand was a good choice that resonated with users.

“They have achieved a degree of respect they haven’t had,” said Danny Sullivan, a veteran search analyst and editor of the industry news site SearchEngineLand. With a tone that suggested surprise, Mr Sullivan added: “They’ve rolled out a product that is good. When people spend time on it, they do like it.”

Anna Patterson, who helped design and build some of the foundations of Google’s search engine and later co-founded Cuil, a search start-up that has yet to attract much of an audience, said: “I think they put together something that is really compelling. They made significant progress.” That is music to the ears of Microsoft’s long-maligned search team, which has watched the company’s market share in search fall by half, to about 8 per cent in May, since it introduced its first search engine in 2005.

“We have had a great start and some good buzz,” said Yusuf Mehdi, senior vice president for Microsoft’s online audience business group.

“We’re settling in for a big long run.” But if succeeding in search is Microsoft’s Mount Everest, as some executives there have suggested, Bing’s success so far has merely put the company at base camp.

Reports from more than half a dozen companies that measure search and search advertising all point to upticks in Microsoft’s business since the release of Bing. Microsoft said on Monday that its internal numbers showed its search traffic growing 8 per cent in June. (ComScore, whose reports are closely watched, is expected to release figures for June on Tuesday.)

Still, Bing remains a distant third in the search race. It would have to triple its audience to catch Yahoo—and grow eightfold to tie Google, which accounts for 65 per cent of searches in the United States.

Sustaining Bing’s early momentum will be harder for Microsoft after the intense marketing campaign fades.

“It is going to be a difficult and long-term challenge,” said Scott Garell, president of Ask Networks, a subsidiary of IAC that includes the Ask.com search engine. Ask has long been praised for its innovations, and it too spent more than $100 million to market its search engine in 2006 and 2007, yet the company’s small market share has barely budged in recent years.

But analysts say Bing’s solid start gives Microsoft a chance to finally sharpen its assault on the search business. No one suggests that Google faces any immediate threat. With many people using more than one search engine, however, some believe Bing has a shot at dislodging Yahoo as the logical alternative to Google. (Google declined to comment for this article, other than to say in a statement that it takes all competitors seriously.)
 “Yahoo doesn’t seem as aggressive as it has been in the past,” said Mark Mahaney, an analyst with Citigroup. Mahaney cautioned that whatever gains Bing achieves in the coming months, he still expected Bing to trail Yahoo a year from now. Yahoo disputed Mahaney’s characterisation. Larry Cornett, the company’s vice president for consumer products for search, said in the last year alone, Yahoo had unveiled technologies that allow publishers to better showcase their sites in search results and tools that make it easier to conduct extensive research.

He said other companies were using an innovative Yahoo technology, allowing them to build their own search services, which collectively garner nearly as many queries a day as Microsoft.

“What we have accomplished in the last year shows an incredible commitment and focus,” Cornett said. Other analysts say if Bing can sustain its early gains, it could have another important effect on the industry: Yahoo and Microsoft could be pushed into a search partnership. Since Microsoft dropped its takeover attempt more than a year ago, the two companies have discussed a more limited alliance to take on Google but have been unable to reach an agreement.

The talks continue apace, according to a person briefed on them. “If Bing can have some momentum, I think it makes a deal more likely,” said Benjamin Schachter, an analyst with Broadpoint AmTech. Schachter said continued momentum would make Bing a bigger threat and a more attractive partner for Yahoo. For now, Microsoft continues to fight alone, but with more vigour than in years past, according to analysts. Less than a month after Bing’s release, Microsoft beat Google and Yahoo to a hot new area in search: it became the first major search engine to index new postings from popular Twitter users almost immediately. The move helped amplify the buzz around Bing.

“I feel like they are a little more daring,” Sullivan said. “They popped this thing out in a few weeks. That’s very Googley.”