Microsoft
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 cant even tell you how big a Herculean effort that is.”
Microsoft, the worlds largest software maker, said yesterday that visitors to Bing.com rose 8 percent in June from the previous month, when the company was using its Live search engine. Microsofts share of U.S. 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. ComScore is set to announce results for the whole of June this week.
Bing is Microsoft Chief Executive Officer Steve Ballmers 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 has, said Hayes Roth, chief marketing officer at Landor Associates, a brand consultant in New York.
Very Lackluster
“Theyre 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 dont 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 the 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 U.S. 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.
“Its not going to be easy and theyre not going to overtake Google,” said Al Ries, chairman of Ries & Ries, a marketing strategy firm in Atlanta.
Googles Dominance
Google CEO Eric Schmidt said last week that the company isnt losing many users to Bing. “They are spending a lot of money getting awareness. They are a capable company and well see,” he said at a press conference in Sun Valley, Idaho.
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.
“Ive been encouraged by Bing,” said Allen, who in the past has been skeptical of the companys search-engine investments. “Its given people at least some signs that their spending could pay off.”
Microsoft gained 84 cents to $23.23 yesterday in Nasdaq Stock Market trading. The shares have gained 19 percent this year. Google, based in Mountain View, California, advanced $9.90 to $424.30 and has gained 38 percent this year.
Disc Jockeys
Microsoft is paying radio disc jockeys to talk about Bing, holding contests on Jimmy Fallons late-night TV show, and even buying ads on Google and Yahoo. Thats 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 Obamas presidential campaign for ways to reach new users. Microsoft employees set up a Bing Facebook page and scoured Twitter for feedback.
Mehdi led Microsofts 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.