Analysts are positively gushing about Microsoft’s Bing. Initial Comscore numbers showed a pop in Bing traffic! Some observers have gone so far as to suggest that Bing will usher in a whole new era in the search war between Google and Microsoft.*
First, there isn’t a search war between Google and Microsoft. Google won what little skirmish there was about 5 years ago, and Microsoft has been gradually surrendering its last remaining territory ever since.
Second, of course traffic to Bing has increased! People are naturally curious, especially given the $80-$100 million ad campaign. Why wouldn’t people check it out?
Third, yes, Bing has added some cool innovations, but nothing that Google can’t and won’t copy immediately.
And that gets to the heart of Microsoft’s problem here: Search isn’t broken. The reason almost 70% of folks use Google is that most folks like Google and most folks are used to Google. If there’s a “better” search engine out there, most people probably don’t know that it’s better (because it’s really hard to tell–in part because “better” is in the eye of the beholder), and many people who can tell probably don’t care.
Sure, people will try a new search engine. Why not? Everyone’s curious. But when they see that it’s not obviously better, and/or when Google immediately copies anything that is actually better about it, most people will head right back to Google again. And they’ll be well-served there.
Imran Khan of JP Morgan just did a survey that illustrates the uphill battle Microsoft faces here: Consumers are happy with Google. They don’t see a need to switch.
Specifically, Imran’s survey suggests that 98% of people won’t switch to Bing and that those who do will be coming from AOL and Ask (folks Microsoft might have gotten eventually, anyway). In our opinion, that’s not a happy enough prognosis to justify Micrsoft’s $10 billion bet.
Now that a month has passed since the launch of Bing, we completed a nation-wide survey to over 750 people above 18 years of age to assess the impact of Bing on their search habits. In our opinion, the results showed that although roughly a quarter of survey respondents were willing to try Bing, the vast majority (~98%) will not be switching to Bing as their primary search engine. Following are the key results:
- The Bing advertising campaign has raised brand awareness and usage. 59.1% of our respondents had heard of Bing and 24.9% tried the new Bing search engine. However, we think that this behaviour is more typical of testing a new product than making a permanent search engine shift. Of the respondents who had tried Bing, only 38.9% used it more than 5 times last month.
- Respondents who tried Bing had a positive experience. Of the respondents who had tried Bing, 38.3% listed the relevancy of the results as its greatest strength, with the variety of results including web, maps, images, etc. coming in second at 22.1%. Speed, organisation of the results page, and the user interface also received positive reviews.
- According to our survey, it seems that most of Bing’s market share gains came at the expense of AOL and Ask. Of our total survey population, 25.8% of our respondents claim that they use AOL search less than before the Bing launch and 24.0% of our respondents claimed that they used Ask search less than before the Bing launch. Conversely, only 10.6% and 16.4% of the respondents claimed to use Google and Yahoo! search less than before the Bing launch, respectively.
- People are happy with their current search experience. From our standpoint, the biggest problem that Microsoft is facing is that 62.6% of our respondents indicated that they did not see any weaknesses in their current search experience. As such, in order to gain meaningful market share, we believe Microsoft has to 1) create a markedly better product, 2) significantly expand its distribution, or 3) invest heavily in content development on its O&O sites. While we expect competition in the search market to increase, we think it will be difficult to shift search behaviour if people are completely satisfied with their current search engine.
- Results indicate a slight market share gain is possible by Bing. We roughly estimate that Microsoft would gain about 200 bps in market share based on respondents who use Microsoft more than 15 times a month. Going forward, 11.4% of respondents believe they will use Bing more than 15 times a month, which is only a 220 bp increase to comparable Microsoft usage prior to the launch of Bing. Asked another way, 9.4% of respondents expect to use Bing as their primary search engine in the future vs. Microsoft’s current primary usage by 7.1% participants. We expect most of the market share gain to be at the expense of AOL and Ask.
*This post originally said that the New York Times was one of the observers who said that Bing could usher in a new era in the search war between Google and Microsoft. This overstated the NYT’s position. In fact, the NYT said, “The once-dubious prospect that Microsoft could shake up the search business has become just a bit more likely.”
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