
A hundred million mistakes: Microsoft's Bing search engine  - kqr2
http://goodexperience.com/2009/06/microsoft-has-a-probl.php
======
iamelgringo
I'm sorry to say, but a $100 million spend on advertising is peanuts in this
game. Google's revenues last year were $16 Billion. Two thirds of that, or $10
Billion came from Google owned pages (read search advertising).

So, if my coctail napkin calculations are correct for every 1% share of their
search advertising business Microsoft stands to gain roughly $100 million plus
punch a competitor in the nose. Not bad. I wouldn't be suprised if Microsoft
picked up an additional 5% of the search market with Bing. That means $500
million more in revenue.

People forget that online and search businesses accounted for just $850
million of Microsoft's $60 Billion total revenue last year. Their revenue
streams are pretty well diversified, and they can afford to bleed money in
search for years if necessary.

Google's primary source of revenue is search and advertising. Any serious loss
of market share in that business is going to hit Google where it hurts: the
bottom line. They have enough cash to take a few lumps. But, they've been
around for 10 years, and they are still clining to a single source of revenue.
That puts them in a dangerous position.

~~~
jsqurred
I think that this is probably the most insightful comment on this page.
Microsoft can probably afford for Bing to fail, because it's not their bottom
line. Their bottom line is licensing with OEMs and large businesses.

I love Google products, but from a business perspective, their only source of
profit is search advertising from their search engine. They are basically
bleeding money through Youtube every single day with apparently no clear way
to generate revenue.

If Microsoft can focus on the domain of searches to very profitable topics,
such as airline tickets and hotels, and provide a better user experience
through statistical analysis and information, they can carve out a part of the
search revenue. No one is going to seriously use Bing for casual search,
Google is too good and too entrenched for that. But, perhaps for some areas,
they might turn to Bing.

~~~
mistermann
Not to mention, I think a large part of google's advertising revenue has got
to be a waste of money for the person paying, it just hasn't been figured out
yet.

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blhack
I tried really hard, but I just can't take this type of writing seriously.

Summary: Microsoft wants to expand their search market. They plan on spending
a lot of money advertising this. This is a bad idea.

Guy who wrote this, listen up:

People do not giving a flying shit about the underlying architechture of _any_
product they use. They do _not_ care about the quality of results. They do
_not_ care about the logo on the top.

They care about how they _feel_ when they're using things.

Lets look at apple's ipod. Yes, they are absolutely successful. Why is this?
Is it because they have a massively superior product to anybody else? Or is it
because they have advertised the living hell out of it to the point of an ipod
being a fashion accessory/status symbol?

Haha, ipods are so _hip_ , what, are you _behind the times_ with that _other_
mp3 player? Haha, look at how happy I am with this terrific, iPod, I'm _with
it! I'm hip!_

The _ipod_ isn't better, the _feeling_ is better.

Look at the bing homepage compared to google. They have a nice big graphic on
there with lots of colors. Its kindof beautiful. Oh, and the graphic _changes_
all the time! Isn't that great? It's like you'd have to go to the page a few
times a day to see all the pictures.

(now _I'm_ adopting that annoying, sarcastic writing style. Sorry)

In search, getting results is the easy part. The part that keeps people coming
back isn't content, its the feeling that they get when they're using the
product.

~~~
axod
You're wrong. The iPod was significantly better. People bought it. _then_ it
became 'hip' and 'cool', and some people only bought it because it was
hip+cool.

I had several mp3 players before an ipod and the difference in usability was
massive.

For a search engine, results are pretty much the only thing that matters.
That's why google won.

~~~
blhack
I apologize, I should have been more specific. What I should have said was
that results were important when web search was in its infancy.

It has been refined to the point of irrelevance.

~~~
rjurney
I still have trouble finding what I'm looking for, so I don't really know what
you're talking about.

You can't put a dress on an also ran and take on Google. It has to kick
Google's ass.

~~~
tom_rath
Why does it have to 'kick Google's ass'? As long as the search result quality
is comparable, there is no consumer lock-in keeping users from changing their
habits and typing 'bing' rather than 'google' in their browser-bar.

Remember: Power-users who fiddle with Google Apps aren't the ones paying the
bills -- it's the casual users who click those ads that bring in the cash.

It may sound foolish, but many of those casual users would prefer to see a
serene image during their work-day rather than Google's stark whiteness. I'm
already seeing many more converting paid clicks coming from Bing than Live.com
ever delivered, so it seems to be working.

Go Bing! I'm thrilled to have another quality location I can advertise with!

~~~
axod
People associate google with search. To get them to change, you have to offer
them something better/more than google. And if you're microsoft, it's an
uphill battle, because most users hate you, so you'll have to be even better
than that.

~~~
tom_rath
The Bing interface is prettier and is as-fast-or-faster than Google. That's
'better/more' enough for the typical computer user.

Remember: If you're reading Hacker News, you're not a "typical computer user".
You're not the type of person that's lining Google's pockets -- you're
probably a cost.

Most "typical computer users" don't hate Microsoft. They're happily using Word
and IE, love FreeCell, and couldn't tell you what Emacs or The Gimp were to
save their lives. People stopped reflexively typing 'yahoo' and 'altavista'
pretty easily when their friends recommended 'google' and could do the same
for 'bing'.

Keystrokes aren't a switching cost and Google isn't nearly as invincible as
you might think.

~~~
axod
When people are searching google, they don't want pretty. They want bare bones
functional, it works. Bing looks cluttered, busy, and reminds me of why
everyone switched to google in the first place - to get away from all the
idiotic 'portals' that were trying to have as much stuff on the search page as
possible.

Let me quantify a little more... People associate microsoft with bad things,
and the past - their operating system crashing and dying. It's a necessary
evil for them (Until they discover linux/osx if they ever do). Google on the
other hand is associated with providing good search results, and allowing them
to find what they want to, quickly.

I agree, google isn't invincible, but I believe if it is to be replaced, it'll
be by a startup. Not a rebranding of a god-awful search engine by microsoft.

>> "That's 'better/more' enough for the typical computer user."

It's really not. You're talking about changing everyones behavior. Why would
they do that? Because it looks prettier? You're delusional.

~~~
ashr
>>"the past - their operating system crashing and dying. It's a necessary evil
for them (Until they discover linux/osx if they ever do)."

Don't intend to start a flame war but this is ridiculous. How do you explain
~95% of desktops in the world running windows? As far as _discovering_
linux/osx is concerned, it isn't for the common computer buyer yet. It is the
computer scientists/hackers who discover them. Most of the common people
probably haven't even _heard_ of linux.

~~~
axod
You're right, they probably haven't even heard of linux, and that's likely the
way it'll stay, even as they start buying netbooks preloaded with linux.

------
te_platt
It seems like I remember a lot of stories like this about Microsoft before the
Xbox came out. Microsoft is going to compete against Sony and Nintendo? Yeah
right! --Turns out they did OK.

Maybe Bing will work out and maybe not but that's no reason not to try. I'm
sure Microsoft is very aware of the risks involved and the other places it
could have invested the money going into Bing. I'm also sure they're aware of
the money and power that goes to whomever controls search.

~~~
Retric
They are still billions in the red.

MS subsidized the hell out of an expensive product for 8 years, spent insane
amounts of money on advertizing, AND bought software companies to increase
demand. Yet it's still fighting for the number 2 spot and are a long way from
making back their sunk costs.

    
    
      Sony: 136 million (PS2) + 22.73 million (PS3) 
      Nintendo: 21.74 million (GameCube) + 50.39 million (Wii) 
      MS: 24 million (Xbox) + 30 million (Xbox 2)
    

It looks like Sony traded 3rd place to win the HD movie format war so it's
probably a huge win for Sony. And Nintendo is still printing money from the
Wii system. It's hard to say what the long term trend is going to be.

~~~
ryanwaggoner
Ok, first of all, it's unfair to say that they're "fighting for the #2 spot"
because the combined total console sales of _last_ generation + this
generation put them in #3. They're in the #2 slot for _this_ generation, which
is all that matters at this point. You don't gauge market position by looking
at product sales over multiple generations.

Second, the Xbox division is profitable. Does that mean they made back their
sunk costs? No, but they're on their way, and I think the original point was
the MS has so much money that they can enter a market big, pour the money, and
wait for things to turn their way. The Xbox is a good example of that.

~~~
Retric
You can talk about "this generation" but I am just looking at sales / month.
PS2 was still selling 100k / month in Feb/2009. And Sony still makes money
from each PS2.

<http://forum.pcvsconsole.com/viewthread.php?tid=11067> (US numbers, worldwide
the market is heavily in Sony's favor.)

Dec/2008 Sony: 1,136,000 = (410,000 PS2 + 726,000 PS3) MS: 1,440,000 Nintendo:
2,150,000

Feb/2009 Sony: 407,000 = (131,000 PS2 + 276,000 PS3) MS: 391,000 Nintendo:
753,000

So Sony still has 2 consuls on the market right now. The same way they sold
PS1's long after the PS2 came out. Walk into a game stop and you will see
lot's of PS2 games on the shelf and PS2's for sale. Once they stop selling
PS2's you will see a lot more PS3's as replacement's sell. Until then note how
most cross platform tiles make games for 4 platforms PS2, PS3, XBox, and Wii.

PS: Some people suggest you need to adjust the totals because the XBox is a
year older and closer to being obsolete, but I think you need to look at
company sales vs product sales. However, the total sales for PS3 and 360 have
tracked fairly closely when you offset for a year so it's a reasonable
argument when looking at totals.

------
breck
Each search = predictable $$. Spending $100M will increase searches and ad
clicks. Which means they will get some, or even more, of that money back.
(Could $100M get a higher ROI elsewhere? maybe, but unless you know the
revenue per query MSFT makes I wouldn't call the marketing campaign a
mistake).

~~~
robryan
There is also the aspect of trying to catch up to Google, even if it isn't a
great investment they may see it as there last real chance to catch Google.
Customers probably wouldn't respond well to another rebranding in future.

Theres also the emotional aspect, you'd imagine Steve Ballmer would like
nothing more than to take Google down a couple of pegs.

------
jsz0
First off, Bing is basically a photocopy of Google with a couple different
features. If you put the two side by side you won't get significantly
different search results. The only real difference is layout. (video
thumbnails, etc) So that being said if Microsoft has a product that is more or
less equal at this point they obviously need to advertise it to gain
marketshare. Is anyone actually unhappy with Google search? No, not really. So
Microsoft's only hope is to at least get a large number of people to try it --
even if they only try it once or twice. There's more opportunity for growth
there than simply trying to wait for people to become dissatisfied with Google
and search out alternatives on their own.

Very few (if any) Microsoft products have experienced real organic grass roots
growth. They've always been forced into the market Top Hat style. Since they
don't have any real monopoly to tie Bing into they obviously have to try a
different method here. They tried with both MSN and Live to leverage IE for
more marketshare and it didn't work. You can't really blame them for trying
something different. When you're dealing with a mainstream consumer oriented
technology advertising is very important.

------
sker
I wonder what decision is driving them to screw their chances in other
countries. Because that's what they're doing. Anyone who gives it a try
outside of the US is probably never going to look back.

One of the reasons for the rebranding was because people wouldn't give Live
another chance. Now those same people are gonna see that Bing sucks and that
image will get hard printed on their mind.

I already recommended it a couple of times to people in my country and they
always tell me it sucks. I'm not gonna spend the extra effort of telling them
to switch to the US version. They don't pay me to do that.

------
chris11
What I had really hoped was that Bing had a good search engine for shopping
for computer hardware. There really isn't anything great out.

Froogle's ok, but sometimes gets bad results. So that $30 hd turns out to be a
$30 cord. And it's kind of hard to comparison shop when you're going by the
lowest price, and the lowest price is not the correct item.

I guess that this is an area for a human-powered search engine. Newegg's
search is a really awesome example of how good search works. Unfortunately,
Newegg is only one company, and I have not found a search engine that does
something similar.

~~~
madh
Have you tried pricegrabber.com?

~~~
chris11
No I hadn't. Thanks for mentioning it. The site looks pretty good.

------
ErrantX
He does begin to make a valid point - but he is stil totally wrong. M$ needed
a search engine - and Bing is actually pretty good: fast, decent results and
useable day to day - it WILL get market share. What they needed was mass
excitment to bring people to the engine - hence the huge budget.

And look at the stats already - ok so they might not be sticky stats but that
is a HUGE amount of traffic. They are pitching $100 Million on people liking
what the see when they visit to check out the hype.

Bing also has very little obvious M$ branding on it - which is another good
tactical move to try and avoid the anti-MS vibe affecting opinions.

in all this has been, so far, a great exercise in marketing and product
launch.

The crucial thing that proves this guy has no clue what he is talkign about is
in the second comment to the blog he replies to a post about how Natal will
"change the console world".

> Thanks, BJ... and that's a perfect example of a good > experience getting
> spread online... you're talking about > Project Natal because you genuinely
> think it's good, not >because it has a clever ad campaign or because some >
> talk-show host said "Natal" in a funny voice.

As we've already seen Natal is just an engineered tech demo - all it IS at the
moment is marketing hype and a clever ad campaign to swing attention to the
Xbox at E3........

------
froo
It really astounds me when people think that Microsoft has to instantly beat
Google. I think they're looking at it from the wrong point of view - They only
really need to beat Yahoo at this stage.

Microsoft are throwing $100M dollars at an advertising campaign, when you
compare that to the tens of billions they were willing to spend on acquiring
Yahoo for their search business last year, its a cheap investment.

Hell, I'd wager that since they'll be recuperating some of the costs through
search advertising, that the $100M spent will only be the beginning. I think
we will all see more advertising spent in the future.

If Microsoft is serious about search, this $100M is a cheap gambit.

Let's say, hypothetically speaking, that Google's users are so entrenched that
they wont be able to steal any of them, yet they do manage to take all of
Yahoo's users, that means they still would control essentially half of the
search volume that Google would control.

$100M for a glimpse at that outcome is cheap, especially when they have the
cash reserves to do it.

So like I said, they just have to steal Yahoo users, which then puts them in a
really good position to outdo Google.

If history has shown us anything, when it comes to technology & consumers, the
more technically superior solution doesn't always win (eg, betamax vs vhs or
IE vs Netscape)

------
spectre
Microsoft needs to take a look at how google became popular in the first
place.

I got told told about by a friend at school and how it was much better then
yahoo. I didn't believe him but after trying I was really impressed. I then
told my parents about it and they had the same reaction I did. Since then my
entire family has been using google.

If Microsoft wants to beat google at search they need to invoke the same kind
of reaction in people.

------
chmike
I don't agree with the author of the article when he writes that we don't need
another search engine. We definitely need alternative search engines here
because the quasi total control and monopole on the information funnelled to
nearly all internet users is a very serious problem. This is too much power in
the hands of one player. In addition to the incredible amount of knowledge it
has on everyones searches and thus interests and works, it is in a position
that would make it possible to totally bias and corrupt the perception a user
can have on knowledge published on the web.

There is also room for improvement in the "experience" provided by google.

But I fully agree with the authors on the evaluation on the Bing stuff. My
experience of bing, by comparing search results on the scientific topic I'm
working on, where disappointing. Microsoft results appeared to be highly
biased toward particular scientific institutions which, I have heard, have
some research partnerships with Microsoft.

An advertisement campaign may catch attention, but it won't change the
experience perception. A very good point of the article author.

------
chanux
>>According to a Microsoft exec in charge of the launch, "The key will be
whether we deliver a product and connect with people emotionally in the
advertising."

No doubts, he is a MS guy.

------
jgilliam
Microsoft's DNA is to copy or buy things, it's simply what they do. It started
with QDOS/86DOS.

~~~
ssn
If you look at Google's top products, most of them come from startups they
bought: YouTube, Blogger, Docs, Maps, Earth...

I can only think of GMail and Reader as products that were originally
developed inside.

~~~
pg
I believe Google Search was developed internally.

~~~
jimboyoungblood
Really? I thought it was licensed from Stanford.

~~~
TJensen
The technology was built by Sergey Brin and Larry Page as part of their
studies at Standford. Google did not just buy their page rank algorithms.

------
ironsam
"Sure, lots of people still pay the upgrade tax on Windows and Office every
two years, but only because they have to."

My primary OS is Window's XP, which I got in 2001-ish. That's a little more
than 2 years...

