Bing Vs. Google

Introduction

The search/digital advertisement business has been very dynamic since its conception in the early 90s and has evolved significantly since then

Our paper is focused on the efforts behind the big software giant "Microsoft" to capture bigger portion of this business away from the dominant player Google.

Does Microsoft have the strategic assets to win in this business? How this business does fits in the Microsoft overall strategy, is the market attractive enough? They are some of the questions we will be answering in the document…

Context

Google is the leader on the web search/digital advertising market capturing 65% of the market worldwide and Microsoft is trying to catch-up Google by innovating in the Web Search space, not only because this segment is profitable but also and foremost to avoid Google gain share on other markets where Microsoft is the leader such as productivity applications (Office), platform (Windows), collaboration (Hotmail), and Web (Internet Explorer).

1. Attractiveness of the industry

Web Search is a very attractive industry and a top priority for Microsoft from the revenue and strategic perspectives. First, Search provides a tremendous revenue opportunity. According to Gartner this is a $29 billion market and is forecasted to double in four years, reaching $55 billion by 2014 (Gartner- ID Number: G00173180). Second and despite Google's dominance, Microsoft maintains there is room for improvement — for example, Microsoft's research shows that half of all searches do not return a useful result, and that 35% of search users express dissatisfaction with search today. Lastly, Google is releasing low-cost or free online competitors to core Microsoft software products. This combination of huge opportunity and significant threat explains why Microsoft considers Web Search as a strategic bet. The table shown on this page summarizes those "threats" Microsoft is trying to minimize by winning on the Web Search space.

On the other hand and according to eMarketer the average consumer spends 20% of her time on the Web. However this trend is changing rapidly as the web is becoming accessible to more users and companies mature to adopt the Web as a profitable channel to announce their products and services.

Microsoft has tried to capitalize on this market opportunity; but still has failed doing so. Their last attempt is called Bing (formerly Live Search, Windows Live Search, and MSN Search) which is the current web search engine (advertised as a "decision engine") from Microsoft. Bing was unveiled on May 28, 2009 at the All Things Digital conference in San Diego. It went fully online on June 3, 2009.

As you can see in Exhibit 1, we have represented "The