ZDNet Must Read:
Analyst: News Corp.'s Google saber rattling really about MySpace
News Corp.'s alleged dance with Microsoft's Bing and Rupert Murdoch's big plan to de-index from Google is likely to be nothing more than saber rattling to secure a semi-respectable MySpace... Continued »
Category: Search
November 23rd, 2009
Analyst: News Corp.'s Google saber rattling really about MySpace
News Corp.’s alleged dance with Microsoft’s Bing and Rupert Murdoch’s big plan to de-index from Google is likely to be nothing more than saber rattling to secure a semi-respectable MySpace search deal, according to an analyst.
Bernstein analyst Jeffrey Lindsay made some key comments on news that News Corp. is looking to cut a deal with Bing (Financial Times, Techmeme).
Today’s articles reporting that News Corp. is exploring planning to remove its newspaper content from Google’s search engine but keep it on Microsoft are unlikely to cause much angst in Mountain View. We think the reports are saber-rattling from News Corp. to put pressure on Google during the renegotiation of the advertising deal with MySpace. We think Microsoft, as usual, is fishing in troubled waters in the hope that it may get something out of the situation or at least give “market leader” (Microsoft management’s name for Google) a poke in the eye.
The MySpace angle was raised by a reader in my last post. And it makes a lot of sense. News Corp. is trying to pressure Google ponying up money for a MySpace search deal. Google is likely to walk away from the MySpace deal, according to analysts.
Google paid MySpace $900 million guaranteed in a 3-year search in a disaster of a deal. Lindsay reckons that Google has countered with only $50 million in guaranteed revenue.
Lindsay writes:
We think the story has broken at a critical time in the Google-MySpace re-negotiation. In the original deal negotiated three years ago, Google guaranteed payments of $300 million per year ($900 million in total) provided News Corp. and MySpace met certain traffic volumes. This deal has been a large negative to Google (we estimate that at its height it reduced Google’s operating margins by over 100bps), but has been a godsend for MySpace right through the economic downturn. We note, however, that Google’s new CFO, Patrick Pichette has brought a long-absent discipline to AdSense for Content renewals and that instead of agreeing to a renewal of $300 million in guaranteed annual revenues, Google is reported to have counter-offered $50 million in guaranteed revenues – giving some indication of just how uneconomic the original agreement was.
Meanwhile, MySpace’s traffic drop has already lowered Google payments to News Corp., estimates Lindsay.
A few points raised by Lindsay:
- Google drives 11 percent to 14 percent of traffic to News Corp.’s properties.
- Murdoch’s de-index Google plan only works if other news sources follow.
- Google doesn’t need News Corp., which amounts to just 10 basis points of daily traffic (and lower ad revenue). News Corp. gets 12 percent of daily traffic from Google.
- Google would walk away from an uneconomical MySpace deal and Microsoft shareholders won’t be too hip to an expensive deal given losses at the software giant’s online unit.
November 22nd, 2009
A Microsoft and News Corp. search pact? It adds up
Microsoft and News Corp. are reportedly discussing a deal where Rupert Murdoch would take his properties and delist them from Google. These sites would presumably wind up on Bing.
The Financial Times reported that Microsoft and News Corp. have talked about de-indexing its news Web sites from Google. In addition:
The Financial Times has learnt that Microsoft has also approached other big online publishers to persuade them to remove their sites from Google’s search engine.
Crazy? Not if the money is right.
Microsoft’s grand plan would be to hamper Google by taking key properties away. And the software giant’s idea to approach other newspapers makes sense too. After all, Microsoft’s search partner Yahoo is really tight with newspapers.
The big picture here: Microsoft wants to ding Google, but it also wants market share. In many respects, search engines could resemble the stock exchanges. The Nasdaq and New York Stock Exchange spend a lot of time and money on poaching big-name companies from each other. However, the investor doesn’t really care where a company lists shares. You use both exchanges.
Carry that analogy out to search and you see what Microsoft is pushing with Bing. Microsoft only wants to be on par with Google. If Bing has properties that garner attention perhaps consumers will use Microsoft’s search a little more. If folks use Bing and Google throughout the day it’s a clear win for Microsoft.
November 18th, 2009
Yahoo's dwindling search share: Time to panic?
Microsoft’s Bing search engine continues to grab market share from Yahoo in a perverse dance before these two companies partner in an attempt to conquer Google.
The latest comScore stats tell the tale. Simply put, Microsoft has nearly garnered 10 percent market share as Yahoo gives ground monthly. Google continues to gain share.
Now compare this to the picture at the end of 2008:
The twisted part: Microsoft and Yahoo are future partners on search (assuming regulators play along). 
The companies announced in late July that Yahoo would outsource search to Microsoft. Microsoft CEO Steve Ballmer and Yahoo CEO Carol Bartz looked like long lost college pals.
Since then, Microsoft has systematically grabbed share from Yahoo. It appears that Microsoft will grab its search share with or without Yahoo. And if Microsoft acquires Ask.com, which may be on the block, the software giant picks up more share. Bottom line: Microsoft
has played the Bing marketing game well. By portraying Bing as a rival to Google it has crowded out the No. 2 player—Yahoo.
Is it time for Yahoo to hit the panic button? Bernstein analyst Jeffrey Lindsay addresses the issue in a research note Wednesday.
At a high-level Lindsay reckons:
- Since the Yahoo-Microsoft deal was negotiated Microsoft has grabbed 130 basis points of U.S. search queries.
- 18 percent market share for Yahoo is an unprecedented low.
- Each 100 basis points of share loss equals a penny of earnings per share.
- Yahoo’s 18 percent market share in search is worth $6 per share to investors.
- Yahoo’s search share could fall nearly 4 points before the deal closes.
Lindsay writes:
The deal structure gives Microsoft a perverse incentive to try and gain search share from Yahoo! rather than Google. As Microsoft cranks up its marketing engine to promote trial of Bing, the player it seems to be hurting most is Yahoo! followed at some distance by AOL. Whether this is a deliberate tactic by Microsoft (which we think unlikely) or not, the 130 bps of search share lost by Yahoo! to Bing we estimate has already cost Yahoo! shareholders $0.40/per share.
Even with all of those moving parts, Lindsay says that the financial impact isn’t as severe as some folks fear. Yahoo’s owned and operated sites carry the day. Simply put, Yahoo is more destination than search player.
Nevertheless, Yahoo is in a dangerous limbo here. Yahoo’s search team is more likely to be focused on sending resumes than advancing the ball. Advertisers are holding out for the deal to close before picking sides and they’re likely to go to the alpha male in the Microhoo deal—Microsoft.
And the biggest problem: Google isn’t standing still. Google is ramping up its mobile features and adding features and functionality at a rapid clip.
Also: Yahoo, Microsoft extend negotiations for search pact
- Yahoo: Major businesses have stabilized; update on Microsoft deal
- Yahoo pays its ‘technical debt’ with IT overhaul
- Yahoo’s search strategy: We’re not fighting “the megawatt war”
- Yahoo-Microsoft deal: Details from the SEC filing
- Ballmer on the Microsoft-Yahoo deal: ‘Nobody gets it’
- Microsoft-Yahoo: Gauging the IT integration risks
- It’s official: Microsoft-Yahoo ink 10-year search pact; Regulator scrum begins
November 10th, 2009
Google: Is there anyone who doesn't have an opinion?
Google is evil. It’s not evil. Perhaps it’s the George Washington of the Internet. Or maybe it’s just one huge dominant company trying to stay out of antitrust trouble.
Ask a person about Google and you’re going to get a bunch of opinions. Why? People love Google and hate it at the same time.
Is Google sometimes creepy? You bet. The search giant clearly knows too much about people. Is it helpful? Sure. What remains to be seen is where the pendulum swings. For now, it’s probably Google as helpful. Let’s survey some notable quotes on Google.
TechRepublic’s Jason Hiner riffs:
After George Washington led the fledgling little U.S. nation to victory in the Revolutionary War, he turned down the opportunity to be crowned king of America. The idea was distasteful to Washington because it went against everything he and his troops had fought for: the promise of a better kind of country based on freedom and democracy.
When England’s King George III heard about Washington preparing to turn down the monarchy and return to his Virginia farm, he said, “If he does that, he will be the greatest man in the world.”
It was, in fact, Washington’s greatest maneuver of all, because of its complete genuineness. It endowed him with an air of incorruptibility. And, because of that, six years later when he was elected the first U.S. President he was able to succeed in uniting all of the fractious elements of the country for one reason - they all trusted him.
The same is true with Google.
Wow. I never thought to put the Washington’s wig on Eric Schmidt.
And then there’s Kevin Depew at Minyanville. Depew takes aim at everything from the Google snack bar. Those annoying patio umbrellas and other Google perks. He appears to be kidding somewhat—I think. But I’m in Depew’s camp. Some days Google annoys the hell out of me. Do no evil? Give me a break. Here’s Depew:
Patio-table umbrellas? Seriously? God, I hate that they have brightly-colored patio table umbrellas.
But wait, I’m just getting started. There’s plenty more to hate about Google. In fact, the company’s “About our offices” page helpfully lists them all. Here are a few things you might see in a Google workspace:
“Local expressions of each location, from a mural in Buenos Aires to ski gondolas in Zurich, showcasing each office’s region and personality.”
Ski gondolas. I hate ski gondolas.
“Bicycles or scooters for efficient travel between meetings…”
Unless you are a bicycle messenger or Lance Armstrong you shouldn’t ride a bicycle to office meetings.
Minyanville’s Mike Schuster says Google is handling power responsibly. He should hang out with Jason Hiner.
It never quite ends with Google. Google dazzles us yet absorbs more of our data. It gives us helpful ads. It’s dominant. Some kids can’t imagine life without Google. Where do I stand? It depends on the day.
Google freaks me out sometimes, but I’ll buy a Droid with a bunch of Google apps. It strikes me odd to run an enterprise on Google, but then I hear Schmidt rap to CIOs and buy in a little bit. My opinion of Google may change hourly if you really tracked me closely.
At some point our zero sum reaction toward Google will land in one corner. In the meantime, prepare for more bipolar Google reactions.
October 28th, 2009
Yahoo, Microsoft extend negotiations for search pact
Yahoo and Microsoft said Wednesday that they have agreed to extend the negotiating period for their search ad pact.
The companies had expected to execute a definitive agreement by Oct. 27. Microsoft and Yahoo announced their search deal in late July.
In a regulatory filing, Yahoo said the company and Microsoft have:
“Mutually agreed to extend the period to negotiate and execute a Search and Advertising Services and Sales Agreement and a License Agreement (the “Definitive Agreements”) reflecting and supplementing the provisions of such agreements as set forth in annexes to their binding letter agreement dated July 29, 2009 (the “Letter Agreement”). The Letter Agreement specified that the parties would execute Definitive Agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized. The parties are working diligently on finalizing the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible.”
October 21st, 2009
Microsoft demos Twitter feeds in Bing
At the Web 2.0 Summit in San Francisco, Yusuf Mehdi, a senior vice president at Microsoft, previews Twitter integration with Bing search results. One of the interesting features he introduces is “hottest topics.” He explains that the Bing-Twitter search will aggregate information around the most popular links shared on any given topic.
October 21st, 2009
Google CEO Schmidt: Microsoft's Bing-Twitter pact 'a smart deal for them'
Google CEO Eric Schmidt said Wednesday that Microsoft’s Bing-Twitter deal “is a good deal for them.” But he also hinted that Google isn’t going away quietly. “Watch this space,” he said referring to real-time search.
Speaking at the Gartner IT Symposium 2009, Schmidt Google can rank real-time information today. He added:
Real-time information is just as valuable as all other information and that’s valuable for Google.
The problem?
Google can rank real-time information, but the technical problem is figuring out what parameters contribute to that ranking. For instance, what factors should be used to determine in real-time who is more important and should garner a higher rank? Simply put, Schmidt thinks there’s a search noise problem with real-time search.
Update: Separately, Google said it would begin indexing Twitter feeds too (Google blog, Twitter blog).
Also see: Microsoft lands Facebook, Twitter deals for Bing
Tweets on Bing: Watch out for more noise, more clutter in search results
October 21st, 2009
Tweets on Bing: Watch out for more noise, more clutter in search results
I have to admit that I have very mixed feelings about this new Microsoft-Twitter deal that will deliver tweets into Bing’s search results.
On the surface, it sounds like a great idea. There’s a lot of buzz on Twitter about a wide range of topics and incorporating those short and to-the-point tweets into the results saves users from going to Twitter Search to eavesdrop on what’s being said by the masses. But then I saw a demo on the big screen at the Web 2.0 Summit in San Francisco - and I didn’t really like what I saw.
The main reason: Too much noise.
Yes, Twitter brings some extra value to search results by giving users more than just what’s published on Web sites. But they’re also offering even more results from a search query - and that’s not always a good thing. Think about it: the sheer volume of query results - whether from Google, Bing, Yahoo or anyone else - can truly be overwhelming. Now, with tweets incorporated into the mix, the results are even busier.
The Twitter feature should be live now - Microsoft was planning on pulling the trigger on it this afternoon. A Facebook feature was also announced but that will be integrated later.
As the Web becomes more social - and filled with content, whether a tweet, a blog post or just a Facebook update from regular Joes and Janes - the information on the Web becomes more cloudy. Search engines need to do some filtering for us - and while I realize that Bing is doing some of that filtering by delivering tweets that are relevant to the search query, I can’t help but think that tweets will clutter the results, not make them better.
As for Facebook on Bing: more noise, more noise, more noise.
I should be happy for Twitter about this. Even though the financial terms of the deal weren’t released, this is a sign that Twitter has finally found a way to take the big volume of tweets - and the real-time feel of them - and turn them into something that brings in revenue for the service. And, because it’s a non-exclusive, surely there must be talks for a similar deal with Google, as well.
Call me Old School - or even overly grumpy - but I’m just not jumping up and down about tweets coming in through a search engine.
October 21st, 2009
Microsoft lands Facebook, Twitter deals for Bing
Microsoft’s Bing search engine won non-exclusive deals to integrate Twitter and Facebook feeds, officials said at the Web 2.0 conference. The deal may be a sign that Google won’t chase pricey search deals.
The news, first reported by Kara Swisher at BoomTown, could be construed as a punch in Google’s gut (Techmeme). Sam Diaz will have a follow-up post on the Bing deals from the Web 2.0 conference. In a blog post, Microsoft said that search needs to keep up with real-time streams of content.
The big takeaway is that there will be data on Bing that won’t be on Google. Simply put, Microsoft notched a search win here.
However, these wins aren’t cheap. Swisher notes that there will be payments of several million dollars from Microsoft to Twitter and Facebook. Bing is buying market share potentially.
But if you’re a Google shareholder you may be happy about this win. Let Microsoft spend its dough on taking share from future search partner Yahoo. Google’s ability to walk away and not chase silly deals has to be taken as evidence of financial discipline.
In fact, we’ll probably see a lot more Bing wins going forward. Rest assured, Bing will power MySpace search. Why? Google learned its lesson from a $900 million with MySpace that generated little return.
October 15th, 2009
Google's third quarter: Expectations are high
Google’s third quarter is expected to be strong and analysts are already busy raising targets for the fourth quarter.
The search giant reports earnings Thursday and Wall Street is expecting earnings of $5.42 a share on revenue of $4.24 billion, according to Thomson Reuters. However, most analysts are expecting Google to top those estimates. The larger question is the fourth quarter: Analysts are betting that an economic rebound is going to benefit Google more than others.
A lot of folks sound like Goldman Sachs analyst James Mitchell:
We raise 3Q2009-FY2011 net revenue and EPS forecasts by 2%-4% to account for better search industry trends and increased advertiser spending on Google. We view CEO Eric Schmidt’s recent public comments on revenue stabilization as positive for 3Q/4Q revenue.
Here’s why there are high hopes for Google’s quarter:
October 2nd, 2009
Worio: Search company aims to enhance the engines, not challenge them
Anytime I get pitched on some sort of new “search engine,” I can’t help but react with a bit of skepticism. Inevitably, once we get past the talk of algorithms, a unique user interface and better results, I always have to ask the $64,000 question: How do you plan to get people to use something other than Google?
Even Microsoft and Yahoo, which presumably have greater resources to challenge Google in search than does a small start-up, is struggling to do it. So, when I posed that question to Ali Davar, CEO of Worio, a small Vancouver-based company that’s working to enhance search results, I have to say I was pleasantly surprised at how the conversation turned.
Davar and team are looking at search from an angle that doesn’t have “Beat Google” written all over it. As much as they’d love to get everyone to migrate away from Google or Yahoo or Bing to come over and start conducting searches on Worio, they’re smart enough to realize that that’s an unrealistic goal.
The Worio site already incorporates search from those three engines into its site. It’s value-add comes in the ability to learn more about your searches and do more than just refine the results. This “discovery engine” goes out and scours the Web for documents, news stories and other types of online content that wouldn’t necessarily appear in the results for a keyword search but might seem like a good fit given the other searches you’ve been conducting.
Plug-ins to browsers or the search engines are obvious ways to get the discovery results into the Google page or Yahoo page you’re already using for search. That’s an obvious.
But, frankly, Davar and team are hoping to build out the technology to a point where a bigger player - Microsoft? Yahoo? Google? - might come in and buy the technology or the whole company. Davar makes a good point when he talks about Microsoft’s desire to go after Google on search. But instead of trying to build everything in-house, Davar thinks that Microsoft should send out a message to the techies that they are in search of new technology to enhance search.
I agree.
Microsoft could take some of that money that they were going to use to buy Yahoo and start swooping up some search enhancing technology that they could incorporate into Bing in order to differentiate it from Google. Maybe Microsoft and others are eyeing the start-ups and they’re just not telling me (or Davar, for that matter.) If they’re not, it wouldn’t be a bad idea to check out what some of the start-ups on working on.
Back in the boom years of 1999-2000, Silicon Valley was alive with entrepreneurs whose sole goal was to be bought by a bigger company. I see nothing wrong with that. If a start-up can get the technology started and making it appealing enough to a larger player, why not sell it, let them incorporate it into their existing product and take your new fortune to start working on the next big thing.
Search needs a spark of new life. Mobile search and local search are helping to refine it into something more useful. This doesn’t mean that Worio is the end-all solution for a Google or Microsoft. But it’s something I would consider using if I didn’t have to change my surfing habits too much just to get it.
September 25th, 2009
How Internet surveillance, IT sleuth work helped indict suspected terrorist Zazi
Source: CBS News video
The indictment of suspected terrorist Najibullah Zazi, who is charged with acquiring and preparing bombs similar to the ones deployed in the 2005 London subway attacks, rides substantially on Zazi’s Internet surfing habits.
Federal prosecutors say that Zazi was trained in Pakistan and shuttled between Queens, N.Y. and Denver in an attempt to prepare bombs. The Feds allege that Zazi was involved in an Al Qaeda conspiracy to attack the U.S.
As you read the indictment and order for permanent detention (also see FBI statement, CBS News) you can almost picture the various connected databases and monitoring techniques at work. Simply put, Internet surveillance and information technology sleuthing played a big role in the Zazi case. FBI agents arrested Zazi in Colorado.
Jeffrey Knox, an assistant U.S. attorney, tells the tale in the permanent detention document. Here’s a look at the key linchpins where IT crossed paths with detective work.
Read the rest of this entry »
September 16th, 2009
Bing usage jumps 22 percent, now at 10 percent share
Bing, the “decision engine” launched by Microsoft earlier this year, has grabbed 10 percent of market share, with total searches jumping more than 22 percent from July to August, CNET reports.
Statistics released by Nielsen this week also show that Google, with a 2.6 percent gain, maintained a strong lead for the month, holding nearly 65 percent market share. Yahoo saw its searches dip more than 4 percent. It holds 16 percent market share.
Just this week, Microsoft grabbed Bing headlines when it launched a beta of Visual Search, a new feature that’s offering some interesting peeks at where the next generation of search may be headed.
September 14th, 2009
Bing's Visual Search: ideal for great-with-faces, bad-with-names types
Today, Microsoft got me to think differently about search.
Until now, I really hadn’t had much reason to switch to its Bing decision engine, which launched back in May, for my Web searching needs. Google was doing just fine. For a while, I was making an effort to use Yahoo but Google somehow always became the default.
But now, with today’s release of Visual Search for Bing at the TechCrunch50 conference, Microsoft may have given me reason to change some of my personal defaults. (Techmeme)
Also see: Mary Jo Foley: Microsoft Bing gets visual search; full 2.0 update later this fall
Until I started scrolling through the images on Bing’s beta page, I hadn’t realized that there were so many uncaptioned images in my head. Take celebrities, for example. I’m great with faces but horrible with names. Give me a lineup of faces and I’ll spot the right one. And, better yet, give me the tools needed to filter the face by gender, age, type of celebrity (actor, athlete, musician, etc.) and now we’re talking a top-notch user experience.
Visual Search needs Microsoft’s Silverlight to run, so this could also be a nice way to beef up the number of Silverlight installs out there. And it would be worth it. Visual Search is just in beta now but some of the categories stood out and made me think of possible ideas that Microsoft may have up its sleeve with visual search. Among those categories: handbags, cars and dogs.
A lot of women I know are ga-ga over purses, my wife included. (Personally, I don’t get it, but that’s for a different blog.) She can describe one to a friend with great detail and will see it on someone’s shoulder across a crowded store. Unlike celebrities, landmarks or yoga poses (yes, they’re there), these are the sort of things you embed into your memory because you may be thinking about owning one someday. I know I think of that with some cars I see. And I know my wife can do the same with purses.
I’m anxious to see what Microsoft has in the works for the coming months and, believe it or not, I’m getting some kind of warm, fuzzy feeling about Microsoft and Visual Search and the future of search, in general. Regular readers will tell you that it’s not often that I say that about Microsoft.
September 2nd, 2009
Amazon knocks Google Book Settlement; Opposition (and some support) lines up
Amazon panned Google’s book settlement with the Author’s Guild saying that the deal “restrains competition” and “usurps the role of Congress in legislating solutions” as copyright and new technologies collide.
Amazon’s rebuttal, which can be downloaded here (PDF), is one of many arguments against the Google Book Settlement that have been filed over the last two days. Google was sued in 2005 by authors and publishers for infringing on copyrights as the search giant moved to digitize books. Google later settled with authors and publishers for $125 million and agreed to set up a registry to ensure copyright owners would be compensated.
Also see: A spirited defense of the Google Book Search settlement
Open Book Alliances opens up assault on Google’s book settlement
Meanwhile, the Open Book Alliance, which counts Amazon, Microsoft and Yahoo as members, and other groups have rallied against it. A hearing is scheduled for Oct. 7 to hear objections to the Google pact with authors and publishers.
In its filing, Amazon said it would show up to the Oct. 7 hearing to voice its objection. The e-tailer said:
August 31st, 2009
Microsoft Bing cashback: 'splendid commercial bribery'
Microsoft Bing’s “decision engine” might aspire to higher things than a simple search, but if you buy a product using its search engine — such as a digital camera or a running shoe — the company says you’ll get some of that money back.
CNET Technically Incorrect blogger Chris Matyszczyk calls it a move that’s “splendidly commercial bribery.”
I’d call it taking Google’s monetization strategy, fusing it with that of a rewards credit card, and upping the marketing budget by about four times.
Here’s the ad:
August 31st, 2009
A spirited defense of the Google Book Search settlement
You’ve heard Google’s case for digitizing out-of-copyright books and its settlement with publishers and authors. And you’ve heard the opposition from the newly formed Open Book Alliance. The most spirited take on the out-of-copyright book issue may have come from Bernstein analyst Jeffrey Lindsay.
The defense in a nutshell goes like this:
- Microsoft and Yahoo could have digitized out-of-copyright books and started plans and then bailed;
- Only Google stayed the course;
- Authors and publishers aren’t getting a bad deal;
- Digitizing out-of-copyright books is a common good;
- If Google didn’t do it nobody would have;
- And the opposition should stop whining about their failure to follow-through.
Lindsay’s defense is a good read and even though I’m squeamish about having one company be the uber library I must admit that the analyst has a point—a few of them even.
The defense comes as both sides of the Google Book Settlement debate jockey for position ahead of an Oct. 7 “fairness hearing” in U.S. District Court. Also see: Open Book Alliances opens up assault on Google’s book settlement
Lindsay kicks off the defense with this:
August 31st, 2009
An odd Yahoo Mail search bug that requires escalation pronto
Can you imagine your email without a search box? I couldn’t until my Yahoo Mail account lost its search mojo.
Email becomes useless without a functional search. And to make matters worse I had to find invites to one (yes there are three) fantasy football leagues. The clock was ticking for my drafts.
Here’s what I would get when I searched in Yahoo Mail:
August 25th, 2009
Google vs. Bing: The global battle
Google controlled 67.5 percent of search market share on a global basis, according to comScore. That’s an all-time high and up from 67.1 percent in June. One analyst reckons that Google’s global dominance will nearly impossible for Microsoft’s Bing to dent.
The comScore stats, relayed by Piper Jaffray analyst Gene Munster, are notable, but the big question is why Google is dominating abroad. Munster adds that Microsoft’s Bing has had little global impact and probably won’t. Here’s why:
While we acknowledge Microsoft’s intention to fight a long battle, we note that gaining share is likely to be significantly harder Worldwide against Google than in the U.S. First, there are several countries that conduct search in unique native languages that need tailored technology (specifically major countries like China and Russia where Google is not a leader). Second, Google has major data centers globally that enable faster request response times as one of Google’s core competencies is speed. Third, Google has a local presence in most major International markets of employees focused on search and while Microsoft likely has a presence in these countries, we do not believe they have search focused employees in many International countries.
In other words, you need feet (and data centers) on the street in these emerging markets. In that context, Yahoo’s move into Arabic countries, one of the few relatively untapped emerging markets, makes a lot of sense.
August 25th, 2009
Yahoo's search strategy: We're not fighting "the megawatt war"
At Yahoo’s press event yesterday, there was some grilling about the new features in search and how much of that had to do with the long-anticipated search deal the company cut with Microsoft last month.
If you’ll recall, the 10-year pact between the two companies involved Microsoft powering Yahoo search and Yahoo becoming the sales force for Microsoft’s premium properties. When they announced the deal, Microsoft CEO Steve Ballmer said the deal gave Bing the scale it needed to compete while Yahoo CEO Carol Bartz said they would bring “boatlaods of value for our users and industry.”
It’s yet to be seen if Bing can make a dent in the search game. But, for Yahoo, yesterday’s announcements about changes to search, Mail, Messenger and Mobile show just how the company that was once the crown jewel of Silicon Valley can, in fact, turn it around and make a comeback.
OK, maybe I’m getting ahead of myself there. But the fact of the matter is that Yahoo is doing some pretty interesting things with search - notably, the search results - that gives users reason to not only turn to Yahoo to find what they’re looking for but to stick around for a while, too.
Prabhakar Raghavan, senior VP of Yahoo Labs and Search Strategy explained that the deal with Microsoft doesn’t keep Yahoo from trying to differentiate itself as a search player that offers more, just as Microsoft can do the same with Bing. Yahoo’s focus is no longer on the technology that powers search and trying to beat the competition with it - the “megawatt war,” if you will. Instead, it wants to take that technology and channel it in such a way that users will want to come back to Yahoo every time they have a query. (See video below) At the press event, Raghavan said:
Let me just say that the agreement calls for Microsoft to supply us with algorithmic Web search results, images and video. Just as their front-end team is free to innovate on top of that layer, we will be free to innovate on top of that layer. So, it’s not that it calls for any specific collaboration beyond that. In fact, I fully anticipate that our front-end experience will evolve differently from that of Bing… The way to think about it is the back end, what I call grabbing of billions of pages and traversing indexes to serve results, that’s sort of the megawatt war and that’s what we’re getting out of it. So, we don’t fight the megawatt war. What we want to compete on is the front end exp that has to do with what is the user trying to get done, what user intent signals do we have and how can we crate the use experience that makes that user happier when they use our metrics and we fully expect Bing will do the same.
The search demo yesterday really made me stop and think about how we use search and what we get back when we conduct a query. What I really liked about Yahoo’s approach was that it took a real-life view of what real people are searching for. The left column - which provided links to related sites that could offer not just related, but relevant, information - was a good call by Yahoo.
Sure, Bing and Google had some of the same results but the differentiator in this case was the presentation. But is presentation enough?
Maybe. Remember: Yahoo used to be the crown jewel of Silicon Valley, the Internet’s main search engine. But it grew beyond that, and suddenly the Web audience was impressed with the simplicity of this newcomer known as Google. Fast-forward years later and suddenly Yahoo had a big takeover target on its back and was being mocked as an Internet has-been while Google continued to grow, grow, grow.
I wouldn’t be surprised if Yahoo - given the time and resources to focus on customer experience instead of back-end technology - gains some ground and starts building itself back up.
Stranger things have happened.
Also see: With Microsoft search deal Yahoo risks becoming AOL
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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