Don’t you believe Microsoft can beat Google?
By Alex Mai at 17 July, 2009, 12:44 am
Don’t jump into the conclusion and answer the question. The recent quarterly report released by Google boost the possibility Microsoft is able to crash Google. Microsoft has been doing some bold approach to against Google and the timing couldn’t be more right for Steve Ballmer to take more actions to stick his words, “Steve Ballmer: Microsoft to beat Google in five years”
“And that will take some time.
“It’s a five-year task,” Ballmer said. But Microsoft is ready to spend a lot of money trying. The company told its shareholders recently that it was prepared to lose “5 to 10 percent of total operating income for several years” to improve its position in search, Ballmer said.”
Launching Bing will not be his only move this year to rival Google.
Why the timing is just right?
From Google 2Q earnings:
“Google said the average price paid per click on its advertising dipped 13% compared to the period last year, while growing 5% compared to the first quarter… That compares to a first-quarter paid click growth rate of 17%. Wall Street had generally expected a second-quarter paid click growth rate in the mid- to high teens.”
1. Google’s biggest strength — and hence its biggest weakness — is search. The 94% of income for Google come from the search engine advertise business. Weakening ads market really puts Google at risk. Google is pushing hard to maintain its position as the king of search. No doubt Google will spend mercilessly to protect its position. However, this time, Google decided to rival Microsoft’s windows instead keep developing it’s core business.
2. Microsoft is going to release official Windows 7 October and pre-orders sold out quite impressive, people give nice feedback about Windows 7 surpass Vista and XP. Revenues by window 7 sale could give Microsoft more bullet to fire on Google.
4. IE 8 is gaining market shares from Firefox and safari.
3. Bing. Bing’s market share helped Microsoft’s search market share jump from 9% to 11%. Bing’s homepage is similar to Google, but features a colorful image on the homepage everyday. Bing so far gets Mircrosoft up to 8% of overall search market from 4%. Experts said Bing will lose largely shares it gained after $100 million promotion is over. Don’t you think Ballmer will let Bing just come alone?
It’s also positioning Bing not just as a search site, but as a so-called “decision engine.” Bing includes features that allow users to book travel and engage in other e-commerce transactions with just a few clicks. “
Microsoft is really push it’s huge cash reserve to work.
5. Google is the will, the way and the word, Google controls almost 75% of Search in the United States according to a post in Web Analytics World Google Up 12 Percent Year Over Year and 80% of all the Paid Search Advertising Share according to the Rimm-Kaufman Group - look at this chart from Alan Rimm Kaufman’s blog:
I am not sure if I would like a regulation of Google, but I hope that someone can offer a serious alternative soon. Having a mediator for the entire Web isn’t possible for the long run for other business. The web needs competition as well as others.
Business, webmasters, publishers, and advertisers all are hoping for an alternative that is able to rival Google in online ads market. People certainly don’t like to spend 75cents of every dollar on the web into one company’s hand.
What could be Microsoft’s next move to rival Google?
Google Adwords + Adsense + 75% Search Market Share = Monopoly. This is where Microsoft is going to take on Google. Microsoft throws its own challenger to Google AdSense.
“Following private tests that have been running for a long time, the software major is all set to release its pubCenter to beta testers in the US. The senior product marketing manager for Microsoft, Kevin McCabe called this beta service a great opportunity for site owners who want to shape an alternative contextual advertising product that will serve their needs better.”
The primary complaint about AdSense has been the lack of information from Google on how it divvies up profits and the sometimes frighteningly small revenue share that it produces for sites running AdSense.
Microsoft is sure to have recognized this problem and it wouldn’t be unheard of for them to launch their own PPC syndication program somewhere down the line. With pockets deeper than Google can even imagine, Microsoft could offer a revenue share that is two, three, even four times higher than that of Google, thus prompting thousands of Web site owners to ditch AdSense in favor of a Microsoft based advertising partnership. The loss of profits that would be associated with a mass exodus of AdSense partners could have a strong impact on Google.
Microsoft Pub@center will come out of beta very soon to rival Google with Bing. You can register with Pub@center as one of those private testers at here. I am the one place Google’s ads in my blog, and I really expect a good alternative into the online ads market.
Google is nothing more than just a search engine.
The company hasn’t created a market leading service outside of search. The office software launch by Google to replace Microsoft’s didn’t quit work out as result shown even they are free, people still prefer to use Microsoft’s office. Anyone remember Google Answers? I think you see my point.
Sure, Google has enjoyed a lot of success with some nonsearch services, like Gmail. I’m not going to argue that it hasn’t. But, I’m trying to demonstrate that Google is vulnerable and that it is far from perfect. To date, Google’s biggest successes remain its search engine and the massive ad machine that sits on top of it. Would anyone seriously argue that Google’s business would survive if its search engine were to collapse tomorrow? I’m highly doubt that. Google is not diversified as Microsoft which put itself in the bad position in the game.
About Google’s new OS, I’m not sure if it can be a big threat to Windows, maybe it does to other operation system. The sign of watching a 7 years old kid turn on Computer, open files, and use IE in Windows said it all. I don’t think any other system is going to replace windows for this generation, at least. Microsoft took decades to develop windows that fully satisfy people’s need and now it again take advantage for Microsoft into Netbook market. See the highlights about Windows 7:
I’m not sure about whether Microsoft can crash Google, it takes time, but I believe weakening Google in this time is surely something Microsoft wouldn’t like to miss. There is a lot to talk about MS buying YAHOO’s search business, I may save it for my next post.
Alex, Mai
Firstly, IE8 is most certainly not gaining share from Firefox or Safari. It is displacing people from IE6 and IE7 only. See below:
http://gs.statcounter.com/#browser-ww-weekly-200839-200931
Secondly, Microsoft has spent billions over the last 5 years building adsense and adword clones, buying publishers like facebook and Digg by paying twice to five times market value for inventory, bought Acquantive for $6B, ten times what it was worth, and then drove off all the talent. Now Acquantive is losing share. DART however is still universally terrible, so If there’s going to be a winner in this, it’ll be a third party network that listens to customers. Microsoft has tried buying off publishers and my guess is that they are now realising how many billions worth of shareholder value they are destroying and with 75% of Google inventory by value sold internally, how little this is going to hurt Google.
Third, the Bing Bump is 0.8%, stolen directly from Yahoo if you believe Comscore’s numbers. Considering the search pact they just signed, they’re stealing from themselves.