News

Search Still Eludes Microsoft, Despite Some Progress

A Microsoft executive fielded questions about the company's Internet search-advertising business at Credit Suisse's Technology Conference on Tuesday.

Yusuf Mehdi, senior vice president of Microsoft's online audience business, talked mostly about Bing, Microsoft's latest search engine, at the Phoenix-based event. Microsoft still holds third or fourth place in search engine use after many years of trying to improve its ranking. It faces stiff competition from Google, the No. 1 search provider.

According to the latest Market Share stats, 84.9 percent of Internet searches worldwide use Google's search engine, followed by Yahoo's (6.2 percent worldwide), China's Baidu (3.3 percent in China) and Microsoft's Bing (3.3 percent in the United States).

Bing has only been launched in the U.S. market so far. However, Mehdi said that Microsoft just "flipped to the first version" of Bing in the United Kingdom and is getting close to rolling out Bing in Canada.

"We have a very long way to go in search," Mehdi said. He noted that Google has been doing search for about 10 to 12 years, while Microsoft's Bing launched in the U.S. market about six months ago. Bing, which Microsoft developed after hiring several key Yahoo executives and technical personnel, is replacing Microsoft's earlier Windows Live search engine.

Mehdi cited comScore stats saying that Bing had attained a 9.9 percent U.S. market share after six months. He also claimed that the Bing brand had carved out a "45 percent" market awareness among consumers, "which is pretty unheard of" in such a short time.

To boost its market share, Microsoft is currently trying to get regulatory approval for a search-ad business deal with Yahoo that was agreed to back in July. The deal could get finalized in "early 2010," Mehdi said. He clarified that the proposal is "not a joint venture" with Yahoo. He described it as a business deal in which Microsoft will do all of the technical work.

The proposed deal calls for Yahoo to build its Internet ad business on top of Bing. For its part, Microsoft plans to allocate $100 million to $200 million for turnaround costs in the first year. The most difficult part of the Microsoft-Yahoo search deal has been migrating advertising campaigns from one platform to another, according to Mehdi.

Microsoft is also moving into the mobile sphere with search. The company already has a search deal in place with Verizon, Mehdi said. He added that mobile devices eventually will take some of the search market share away from the PC. In addition, mobile devices will open up new search experiences for users. People will be able search by voice commands and use GPS for mapping and local information on their mobile phones, he said.

Microsoft has been doing a lot of work with rich clients, such as RIM's devices and Apple's iPhone, Mehdi said. To some extent, hardware and software vendors have been taking control of elements that used to be carrier owned, such as introducing new form factors or operating systems, he added.

An audio recording of Mehdi's Credit Suisse talk can be accessed at Microsoft's investor relations page here.

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.

Featured

  • Nvidia Buys Chip Maker Arm for $40 Billion

    Nvidia has entered into a "definitive agreement" to acquire U.K.-based chip design company Arm Ltd. from the SoftBank Group in a stock-and-cash deal valued at $40 billion.

  • The 2020 Microsoft Product Roadmap

    From the next major update to Windows 10 to the next generations of .NET and PowerShell, here's what's on tap from Microsoft this year.

  • Oracle, Not Microsoft, Wins TikTok Buyout Bid

    Oracle's proposal to acquire TikTok's U.S. social media operations emerged victorious over the weekend, putting an end to Microsoft's competing buyout bid.

  • Microsoft Making Progress on Windows Virtual Desktop

    A recent "Desktops in the Cloud" podcast chat gives some insight into Microsoft's progress on its Windows Virtual Desktop (WVD) service.