The Internet

Microsoft's Bing Is Gaining Share


If Microsoft's (MSFT) goal was to hear Bing used as a verb, there are signs of success. In April about 12 percent of all Web searches were performed using Microsoft's year-old search engine. While that doesn't exactly make Bing a Google (GOOG) killer, it seems to be holding its own. Searches on Bing are up 4 percent since its launch a year ago, according to comScore (SCOR). Meanwhile, Google's share is flat at 64 percent. "I do hear people saying 'I Binged it,' " says Danny Sullivan, who runs the search-analysis Web site Search Engine Land.

Microsoft has been trying to build its presence in search since 2004 (its last pre-Bing effort was called Live Search). Despite huge investments, Microsoft's share of all Net searches fell eight percentage points between 2004 and 2009. Most of the roughly $6 billion in losses racked up by Microsoft's online business division since 2006 are related to search, estimates Matt Rosoff, an analyst with market research firm Directions Marketing Group.

For Bing to be successful, the bump-up in searches will have to translate into more business from advertisers. For years, many companies that wanted their ads to appear alongside search results have sought a strong alternative to Google to get better prices. Range Online Media, a search-marketing firm, says most of its clients spend 5 to 9 percent of their budgets with Bing, up from the 2 to 5 percent they spent on Microsoft's search products two years ago. Curt Hecht, head of Publicis Groupe's digital ad technology unit, says some clients who had been taking a "wait-and-see" approach to Bing are now asking whether they are "underinvested" in Microsoft's search engine.

Bing moved away from Google's minimalist formula of a plain white page with a search box that produces a list of 10 blue links. Instead, Bing's home page showcases a daily high-resolution photo. There's the usual column of results in the middle, and a list of relevant categories on the left. If you Bing Lady Gaga, for example, these categories include "Lyrics" and "Albums." This month, Google unveiled a redesigned search page with a similar layout. "It certainly seems that they've been spurred by something over the past year," says Mike Nichols, Bing's general manager. (Google spokesman Gabriel Stricker: "We have many competitors, and we take them all seriously.")

Bing may never come close to passing Google as the top search engine, but it may not have to. A 2009 deal with Yahoo! (YHOO) makes Bing the search technology that Yahoo will use on its Web sites, though it won't use the Bing name. If Yahoo and Microsoft hold their current shares, Bing will power nearly 30 percent of all searches. "At that size, advertisers can't ignore them," says Rosoff.

The Bing team is pushing for a bigger slice of a market that Google doesn't yet control: mobile devices. While Google is the default search engine on Apple's iPhone (APPL) and other products, Microsoft is cutting deals to entice phone owners to give Bing a try. For example, Microsoft covers the cost of free songs given away by Tapulous every time a fan of its Tap Tap Revenge game agrees to download the Bing app for the iPhone. Says Peter Farago of Web analytics firm Flurry: "Microsoft is being very smart in terms of building market share for Bing in mobile."

The bottom line: Bing may never pass Google as the No. 1 Web search engine. On mobile devices, though, the battle for dominance is not over.

Bass is a reporter for Bloomberg News in Seattle.

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