In a classic example of what goes up, must come down, Microsoft’s highly touted and expensive search engine, Bing, lost significant market share in September. Why?
From CNN Money:
According to a report by analytics firm StatCounter, Microsoft Bing’s share of the U.S. search market decreased by more than 1 percentage point in September. Bing, which Microsoft is backing with a massive marketing campaign, had 8.51 percent share in September compared with 9.64 percent in August.
Over one percentage point is actually a drop of around 12-percent in search share. The beneficiary of Microsoft’s loss? Guess.
Google’s share of the U.S. search market increased to 80.08 percent in September compared with 77.83 percent in August.
All is not lost for Microsoft or Bing. Yahoo!‘s deal with Microsoft will eventually double Bing’s search engine share.
Yahoo’s share of the search market decreased from 10.5 percent to 9.4 percent, according to StatCounter.
Problems?
What’s the problem with Bing? With all of Microsoft’s mighty money, the Windows maker has done nothing but lose money hand-over-fist in search, and now loses more market share to Google. Why?
The answer is easier than Microsoft would have us to believe. Unthroning an incumbent or dominant product or service requires more than just making a similar product. The differentiation between Google search and Bing search is modest, if noticeable at all. Even an exact copy of a product will fail unless there is a compelling reason for a user or buyer to switch.
Differentiation
Price? Search is free, so Microsoft can’t lower the price or exclude Google from Windows the way it did to Netscape. More features? Who’s better at layering on features than Microsoft? How does a search engine compete with Google on features? Users want results in a single click, not more options.
Without any real differentiation, or any compelling reason for a user to switch to Bing after trying it out, Google’s search engine users default to the de facto. Microsoft is left with an expensive, albeit attractive, search engine, and a miniscule market share with insufficient revenue to cover costs.
This is a battle that Microsoft cannot win… unless it finds a way to bring vastly superior search results with a single click, or, perhaps ads that pay the user to click more frequently (I made that up, but it shows the futility of differentiating products that basically do the same thing).
Change Happens. Slowly
Apple’s Mac OS X, after eight years, is only beginning to claw away at Windows market share. Why? Windows, for all the problems, foibles, insecurities, and discomfort imposed on users, is good enough. The compelling reason to switch affects a limited number of Windows users, though the trend grows.
Likewise, it is exceedingly difficult for competing media players, Microsoft’s Zune included, to derail Apple’s iPod and iTunes juggernaut because the status quo is very good, and the alternatives do not provide a set of compelling reasons to switch.
Unless and until Microsoft provides a truly and obviously better search product, the company’s efforts to unseat Google as the king of search are doomed. Similar efforts to put Windows Mobile on smart cellphones has met with failure which is likely to continue.
Why? Competing products, and include BlackBerry, iPhone, and Android on the list, are attracting mind share and market share of smartphone buyers. Windows Mobile is not, in fact, is losing share and handset makers, and will be hard pressed to find customers to carve out a significant market share. Apple’s iPhone already brings in orders of magnitude more revenue and profit than Windows Mobile.
Bing is merely another example of where Microsoft continues to fail and flail.