| SEATTLE, June 19
SEATTLE, June 19 Microsoft Corp's new
chief executive, Satya Nadella, likes to boast that Bing is
growing and powers 30 percent of the Internet search market,
making it a worthy competitor to Google Inc.
But within the advertising and research industries that
measure and manage search as a business, Microsoft's strength
is an open question.
The figures quoted by Microsoft, which include searches by
partner Yahoo Inc, are much higher than the rate at
which people actually click on the links that a search returns,
according to new studies by industry researchers.
The new search data calls into question Bing's effectiveness
for advertisers. It also lends support to the argument from some
investors that Microsoft should sell Bing.
Microsoft has been in the Internet search business since
1998, and Bing - five years old this month - is its latest and
most intense effort to unseat market leader Google. The company
initially assumed that its world-class engineers and the sheer
scale of its Windows user base would sweep away competitors, but
Google has not relinquished any share.
To measure its progress in the search business, Microsoft
prefers to cite market share numbers from comScore, which
established itself as the prime source for Internet data a
decade ago, when reliable numbers were hard to come by, and has
long been considered the gold standard.
ComScore said Google sites had 67.6 percent of U.S. searches
in May, compared with Microsoft's 18.8 percent and Yahoo's 10
percent, which are both powered by Bing.
ComScore bases its calculations on desktop computer Internet
searches by about a million anonymous people in the United
States. It does not measure searches on mobile phones or
tablets, which are dominated by Google, but it does count
searches within the big MSN and Yahoo portals, factors which
help explain why Bing has such a significant share.
But advertisers are less interested in searches than what
users do with search results. They want traffic to their sites;
they care what search result links users click and what sites
they visit. In recent years, technology has made that behavior
much easier to track.
"Clicks are important because they tell us how well we are
capturing (search users') demand, and of course advertisers pay
based on clicks," said Jason Hartley, group media director at
search marketing firm 360i, whose clients include brands such as
Coca-Cola and Verizon. ComScore data "can lead you down the
wrong path, or it doesn't give you as much insight as you'd
like," he added.
A study published last month by Conductor, a company that
advises marketers on how to stand out in Web searches and social
media, showed Google accounted for 85 percent of traffic to
websites from search engines, with only 5 percent from Bing and
7 percent from Yahoo. The study was based on 100 million visits
to 63 websites from clicks on search links - not counting ads -
including from mobile devices.
Ireland-based StatCounter, which gets data from more than 3
million websites, found Google accounted for 80 percent of
search engine-supplied U.S. traffic in the last three months,
Bing 10 percent and Yahoo 8 percent. Search marketing firm
Define Media Group came up with similar figures based on 1.4
billion visits from search engines so far this year to 125
Advertisers make the same point with their spending: web
marketing firm IgnitionOne estimates that Google gets about 77
percent of web search ad dollars against 23 percent for
Yahoo/Bing. Design software maker Autodesk told Reuters that it
generally splits search ad spending 80/20 in favor of Google
with its "significantly larger pool of users".
The does not mean comScore's data is faulty. Rather, many in
the search industry say it doesn't measure what advertisers and
website owners want to know, the web traffic generated by a
"Their current methodology is likely to mislead those who
take it at face value," said Rand Fishkin, a well-known pioneer
in the search engine optimization field and co-founder of search
advisory firm Moz.
ComScore stands by its figures. Vice President of Marketing
Andrew Lipsman said the data is not designed to measure where
Web traffic goes, only the searching behavior of consumers. He
added that comScore is working on integrating mobile device
results into its data.
Microsoft said it had no reason to doubt comScore's figures.
It added that it is committed to Bing, which is a core part of
Microsoft's game console Xbox and its coming voice assistant on
Windows phone. Bing also powers other companies' sites and
devices, including Apple Inc's Siri and soon Apple
desktop search. Bing is integrated into translation features on
Facebook and Twitter.
Microsoft search advertising revenue rose 38 percent last
quarter, helped by higher prices and more searches, it said in
its last quarterly report, without disclosing dollar figures.
Microsoft's online services unit, which includes Bing, lost
more than $14 billion in Bing's first four years, including the
cost of a failed acquisition. Last year, Microsoft put Bing in a
new reporting group so its financial performance is obscured,
but many on Wall Street assume Bing is still losing money.
Craig Beilinson, director of consumer communications at
Microsoft, said it "continues to gain traction" as a standalone
search engine and powering other companies' products.
While Bing has grown, that improvement has come mostly at
the expense of Yahoo, according to comScore figures. The
combined share of Bing and Yahoo has risen less than one
percentage point in five years, taking share from smaller
competitors Ask.com and AOL Inc, not Google.
Some search marketers say they like having an alternative to
Google, and that Bing/Yahoo can be a good investment for some
"Clients that have an older demographic, we sometimes do
better on Bing or Yahoo," said Pauline Jakober, founder of Group
Twenty Seven, which advises mid-sized clients on paid search ad
campaigns. Business-to-business, like janitorial or industrial
types, could do well on Bing, while tech clients might not even
want to advertise on Bing, she said.
But Bing has drawn criticism from some investors because it
is expensive to operate, requiring resources from engineers to
The new search data called into question Bing's usefulness,
said Todd Lowenstein at HighMark Capital Management.
He and other investors believe Microsoft should focus on
products that businesses pay for, such as the Office suite of
products and the Windows operating system.
"Microsoft would be better served selling Bing to another
player who can use the asset," he said.
Ironically, Google does not highlight this weakness any more
"Google loves the fact that anybody other than Google looks
like they are doing better," said Danny Sullivan, longtime
industry observer and editor of the Search Engine Land blog.
"It's a very handy tool for them to go out and say you don't
need to be regulating us, look, the market's strong."
Google and Yahoo declined comment on the comScore data.
(Reporting by Bill Rigby, editing by Peter Henderson)