Microsoft says users warming to Bing

Workers talk outside a building on the Microsoft Corp campus in Redmond, Washington. Bloomberg News

SEATTLE: Microsoft Corp, struggling for years to challenge Google Inc, says users are warming up to its Bing Internet search engine.

The first signs of a shift came in March at a confidential preview of Bing for analysts and partners, said Yusuf Mehdi, the executive in charge of business development for Bing.

"I started thinking to myself, 'Hey, we might actually have a hit,'" Mehdi, 42, said in an interview. Taking users from Google will be tough, he said. "I can't even tell you how big a Herculean effort that is."

Microsoft, the world's largest software maker, said that visitors to Bing.com rose 8 percent in June from the previous month, when the company was using its Live Search engine. Microsoft's share of US search queries rose 2 percentage points to 11.1 percent in the first week after Bing was announced on May 28, according to ComScore Inc, a researcher in Reston, Virginia.

Bing is Microsoft CEO Steve Ballmer's third run at creating a brand to compete with Google. The new site groups together reviews when people shop for products and shows predictions for fares when they search for flights. Few companies have tried to rebrand a product as many times as Microsoft, said Hayes Roth, chief marketing officer at Landor Associates, a brand consultant in New York.

"They're taking something that was a very lackluster product," said Roth, whose firm is a unit of WPP Plc and does brand consulting for Yahoo! Inc. "They came up with a clear positioning. I don't think anybody is saying that it looks like Google anymore."

Microsoft, which abandoned a $47.5 billion bid for Yahoo last year, is counting on Bing to expand its share of search-ad spending. That market will probably grow 11 percent to $21.5 billion this year, according to Sanford C Bernstein & Co. Microsoft posted its first ever sales drop in the three months ended in March, and may have had a 9 percent decline last quarter, according to a Bloomberg survey of analysts.

In May, Google handled 65 percent of US search queries, followed by 20 percent for Yahoo and 8 percent for Microsoft, ComScore said. Because it handles so many users, Google has more information on what people are looking for, helping improve results.

"It's not going to be easy, and they're not going to overtake Google," said Al Ries, chairman of Ries & Ries, a marketing strategy firm in Atlanta.

Google's dominance

Google CEO Eric Schmidt said that the company isn't losing many users to Bing. "They are spending a lot of money getting awareness. They are a capable company and we'll see," he said at a press conference in Sun Valley, Idaho.

Mehdi, who worked on Microsoft's aborted plan to buy Sunnyvale, California-based Yahoo, said the outcome may have been "fortuitous" because Yahoo's brand doesn't focus on Web searches.

Shareholders have questioned whether Microsoft should even bother trying to go after Google. For now, Bing has taken some of the pressure off, said Ken Allen, a fund manager at Baltimore-based T. Rowe Price Group Inc, the sixth-biggest institutional holder of Microsoft shares.

"I've been encouraged by Bing," said Allen, who in the past has been skeptical of the company's search-engine investments. "It's given people at least some signs that their spending could pay off."

Microsoft is paying radio disc jockeys to talk about Bing, holding contests on Jimmy Fallon's late-night TV show, and even buying ads on Google and Yahoo. That's in addition to TV spots and ads on Web sites such as the New York Times.

Mehdi, a 17-year Microsoft veteran who led marketing for Windows 95, said he studied Barack Obama's presidential campaign for ways to reach new users. Microsoft employees set up a Bing Facebook page and scoured Twitter for feedback.

Mehdi led Microsoft's first foray into the Web-search market in 2004. This time, Microsoft shifted strategy to show how Bing is different, rather than as good as Google, he said.

The percentage of consumers who say they've heard of Bing is almost four times the rate of the previous brand, YouGov Plc, a London-based market research firm, said last week. It's the biggest increase ever in the firm's data. Bing still has work to do. So far this year, the brand was recognized by about 19 percent of respondents, compared with 57 percent for Google and 40 percent for Yahoo, YouGov said.

Before Bing's release, Danny Sullivan, editor in chief of Search Engine Land, said Bing wouldn't be able to live up to the hype. Now, Sullivan says Microsoft may lure away users - though mainly from Yahoo instead of Google.

"People like to have alternatives: the Pepsi to your Coke, the Avis to your Hertz. Yahoo has been the alternative to Google," said Sullivan, whose Web site tracks the industry. "Ultimately I think Microsoft will get Yahoo's share one way or the other."

Yahoo says it has maintained its market share and is making improvements to its search engine. Bing's early popularity could be partly tied to the marketing campaign, said Larry Cornett, a Yahoo vice president.

"It's too early to tell," he said. "I would certainly look at Yahoo being in a very strong position. It's a key starting point for over 500 million people every day."

Mojo back

Microsoft is "sort of getting their mojo back" with Bing, said Jeffrey Lindsay, an analyst at Sanford C Bernstein in New York. The site's backgrounds, from the Taj Mahal to London's Tower Bridge, make Google's primary colors on a white background look like "a trip to the pediatric dentist", he said.

Lindsay said Microsoft's advantage may be short-lived, given that the company has made so many missteps in the past.

Microsoft realized about 18 months ago that it needed to rebrand its search engine, said David Webster, who oversees Microsoft's brand strategy for search, Xbox and Windows. In tests, consumers shown Microsoft search results under Google's name rated them positively. When Google's results appeared under Microsoft's Live Search brand, they got the thumbs down, he said.

"At that point, you say, 'Maybe we can engineer our way to a better mousetrap," Webster said. "But if we don't change the name of the mousetrap it's not really going to matter'."

Bloomberg News

(China Daily 07/20/2009 page11)