Microsoft, in Search of an Edge

For years Microsoft has watched in frustration as Google dominated the online-search market, raking in billions of dollars in search-related advertising. No matter what Microsoft tried, it seemed, Google just got stronger and stronger, gaining ever more market share. All this was driving Microsoft CEO Steve Ballmer a little bit crazy. If there's one thing Ballmer simply can't stand, it's watching dollars go to Google (or anyone else, for that matter) that he thinks should be going to his company. Especially when those dollars are counted in billions. For Ballmer, this is like living in a nightmare, and he will do anything—anything—to make that nightmare stop. As a former Microsoftie once told me, "Don't ever get between Steve and the money." 

But Microsoft is very persistent, and very patient. They're also very good at adapting ideas from other companies and sometimes even improving on them. And now, guess what? After a decade of flailing and failing, Microsoft rolled out a new search engine in June, its third attempt to compete with Google on that front. This one, called Bing, has managed to gain a bit of share in the Internet search market. What's more, Microsoft has done it the old-fashioned way: by being better and more innovative. Weirder still, Bing is actually getting loads of positive buzz from hardcore techie types, the folks who usually deride any product Microsoft introduces simply because it comes from Microsoft. (To use a Star Trekanalogy, when it comes to techies and their biases, Microsoft is like the Mirror Universe of Apple: Apple can do nothing wrong, Microsoft can do nothing right.)

Suddenly the Borg, as Microsoft is not-so-affectionately known, seems to have a bit of a hit on its hands. Could this turn things around in the fight against Google? The short answer is, it's too early to tell; Bing only went live last month. According to research firm StatCounter, over the course of that month, Microsoft saw its share of U.S. Web searches inch up a tiny bit, from 7.2 percent to 8.23 percent. Last week, on July 9, Bing actually leapt ahead of Yahoo to become the No. 2 search engine in the U.S., with a 12.9 percent share versus Yahoo's 10.15 percent. That was just for one day, and Microsoft has beaten Yahoo on isolated days in the past. But it's still noteworthy, considering how new Bing is.

Bing and Yahoo remain way behind Google, which handles more than 70 percent of U.S. Web searches on any given day. (In fact, a different researcher, Hitwise, just put out numbers showing Google continuing to gain share in June, even after Bing came out.) The best anyone can say at this point is that Bing seems to be doing better than other search engines that have sprung up to challenge Google—like Cuil, which got loads of buzz last year and then quickly fizzled out. "Bing is gaining some traction," says Aodhan Cullen, CEO of StatCounter. "It's slow but steady. I think they're going to capture some market share."

Folks at Microsoft say they're seeing some encouraging data too. For example: the number of "unique visitors" using Microsoft search products has grown 8 percent since Bing was launched. They've seen a threefold jump in the number of people using the search engine for shopping. "We're not breaking out the champagne yet. But we're cautiously optimistic," says Danielle Tiedt, general manager of Microsoft's Online Audience Business Group. 

Certainly Bing is getting a boost simply because it's new, and because everyone has been talking about it thanks to Microsoft's marketing push. It's also getting some great reviews from David Pogue of The New York Timesand from Katherine Boehret of The Wall Street Journal.