Searching For Market Share: Microsoft Bing Continues To Lag

Bing, which Microsoft launched with much fanfare in June 2009, and other Microsoft search sites accounted for 14.4 percent of all search queries in the U.S. in July, according to numbers released this week by market researcher ComScore. That's unchanged from June and up only 0.3 points from 14.1 percent in May.

That compares with Google's 65.1 percent share of all U.S. search queries in July and 65.5 percent in June. Yahoo sites held a 16.1 percent share in July, up from 15.9 percent in June.

Experian Hitwise, another tracker of search engine usage, calculated that Bing accounted for 13.19 percent of all U.S. searches conducted in the four weeks ended July 30 (up from 9.86 percent in July 2010) while Google accounted for 66.05 percent.

Microsoft executives profess to be satisfied with Bing's progress. "This is a long-term game for Bing and Bing continues to be focused on creating a great consumer experience, solid execution and steady market share growth," said Stefan Weitz, director of Bing, in an e-mail exchange.

Bing has "seen compelling progress in many areas," Weitz said, noting that Bing's usage market share has increased more than 50 percent since its launch. The number of people likely to recommend Bing has grown by a factor of four, he said, and Bing has an "unaided brand awareness over 69 percent."

The Experian numbers also have some good news for Microsoft. Bing-powered searches in July exceeded 28 percent, given that Yahoo Search uses Bing as its underlying engine. Experian also provided Microsoft with some bragging rights by concluding that Bing and Yahoo Search achieved an 80 percent search success rate in July, beating Google's 67.56 percent success rate.

The Bing search engine is a major component of Microsoft's Online Services Division, which also includes MSN, adCenter and advertiser tools. Revenue for the division increased 17 percent in the fourth quarter ended June 30 to $662 million and 15 percent for all of fiscal 2011 to $2.53 billion.

But the Bing search engine's failure to make significant gains against Google has become a drag on Microsoft's bottom line. The Online Services Division recorded an operating loss of $728 million in the fourth quarter and $2.56 billion for the fiscal year.

That's led to a view among some analysts and investors that trying to compete against Google in the search engine arena is a losing proposition for Microsoft. In May Greenlight Capital hedge fund manager and Microsoft investor David Einhorn called on Microsoft CEO Steve Ballmer to step down, citing the search engine's poor performance as a major reason.

Problems integrating Yahoo's operations with Microsoft's adCenter platform have resulted in less search-related ad revenue than the companies had anticipated when Microsoft and Yahoo struck a major alliance in 2009. That has added to the Online Services Division's financial performance woes. During Microsoft's quarterly earnings call last month Microsoft CFO Peter Klein said the companies expect to have that situation resolved by the end of this calendar year.

Although Bing isn't a product that partners resell, Weitz said Microsoft's goal is to position it as a platform for third-party developers and so has opened up Bing's APIs to developer partners.