Ballmer touts Bing; analysts still wary about its future
Microsoft CEO lists Bing successes to Web 2.0 Summit audience, but many wonder if it can really take on Google
Computerworld - SAN FRANCISCO -- Microsoft CEO Steve Ballmer Tuesday touted the success of the Bing search engine in the back yard of rival and search king Google.
Ballmer, speaking at the Web 2.0 Summit here, said the search engine has "got our muscle up in relevance" as it grew from a 7% U.S. market share after its launch in the summer of 2009 to about 15% today. "It sets the stage for reinventing the category."
While analysts agree that Bing has gained significant market share since its launch. they add that Microsoft is a long way off from putting a dent in Google's reign.
"The issue is that Google remains good enough and you can't take out a dominant player by bringing forward a competent product because people just don't break their habits easily," said Rob Enderle, an analyst with the Enderle Group.
"You have to motivate people to change and so far Microsoft has been unwilling to resource this effort to a level that would assure success. They are spending about a tenth of what is needed to actually put Google at risk so they are just chewing up their own resources that would likely be better spent in an area where they are more competent," he added.
With its search partnership with Yahoo, Microsoft gained some momentum but remains planted behind Yahoo and Google, which remains the easy leader. In September, Google handled 65.3% of U.S. searches, while Bing had 14.7%, according to comScore, an Internet tracking company.
Bing and Google each have small increases and drops in market share from month to month, but Google has not lost significant share.
"The most significant fact about search market is that Google's share has not declined and some data suggest that it is still growing," said Hadley Reynolds, an analyst with IDC.
"So Microsoft -- and Yahoo -- if there still is a Yahoo in six months -- will not be really moving the needle in the market until Bing and its partners start to dent Google's lead. This probably means reaching a share of searches in the 35% to 40% range," Reynolds added.
Ezra Gottheil, an analyst with Technology Business Research, said it will likely be some time before Microsoft sees any real payoff from the significant sums it has spent on Bing.
"I don't think [Bing] is profitable or close to profitable," Gottheil noted. "But it has grown and is likely to continue to grow. It probably will be profitable eventually, but I don't think it will ever pay back its investment."
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