Microsoft’s Bing search engine is over two years old now, an eternity in the IT world, but its lackluster performance by market share has analysts wondering: has Bing peaked?
Bing’s Market Presence
Bing, if you count Yahoo search, which is now powered by Bing, is the search engine preferred by roughly 30% of American searchers, with Google used for about 65% of searches, but its global market share is only 4%, compared to Google’s 80%. This is likely due to Microsoft’s U.S.-focused marketing efforts, but it also suggests an affinity for Google’s results, rather than Bing’s, for foreign-language search results.
The market share has not come cheaply. Microsoft has spent billions in the last year to develop Bing’s Web presence, but data suggests that the majority of market share that it has gained has been at the expense of smaller search engines, rather than Google.
According to industry analysts at Trefis, “Microsoft incurred losses of $2.6 billion in the online division in the fiscal year ended June 30th and lost $728 million last quarter alone. It has been bleeding cash for almost 22 consecutive quarters now, with no signs that it will ever improve.”
Analysts expect investing at this rate to slowly increase Bing’s global market share up to 6% by 2018, but Bing is expected to meet major resistance from Google once all of the smaller search engines have been absorbed by one of the two major engines. Google’s search engine share within the U.S. Is expected to hold steady or increase until 2018, which leaves little room for Bing to gain any market share over the next several years.
The Decision Engine
Bing markets itself as a decision engine, rather than a search engine. What does this mean, exactly? Bing prides itself on offering value-added services to search, like the ability to book a flight or make a restaurant reservation without ever leaving the search page. This is provided by Bing’s API to major sites like OpenTable, Expedia, but it has not been made public to smaller marketers. If Bing was to make this functionality public, so that the sites people visit every day could offer “decision engine” services right on Bing’s search results page, it would shake up the market share of both Bing and Google, but the reception of the service would determine whether Bing comes out on top or simply appears too spammy.
In America, Google is preferred to Bing by younger, more educated, but less wealthy consumers. Bing sees higher advertisement click rates, likely due to the primary demographic being one that has more buying power. Bing’s clearest advantage is in the 55-64 age demographic. Analysts at Microsoft state that “Bing users are 11 percent more likely to buy than Google users, and 31 percent more likely to purchase than the web’s general user. Bing’s is a decidedly “shoppy” demographic that e-commerce companies should not ignore.”
Chinese search giant Baidu recently partnered with Bing to provide English search results to its Chinese customers, which could be the bump that Bing needs to find inroads, if slowly, into the Chinese market, which could jump-start the search engine’s market share.
Whether or not Bing will ever truly compete with Google is a question to be answered ten or more years down the road, but if any tech company has the clout to match Google, Microsoft does. Google’s search empire is worth about $200 billion, so pouring money into the sector is likely to continue for both Microsoft and Google. If it eventually contributes to market share erosion for Google, then Bing is the most likely competitor to see market share gains.