SAN FRANCISCO--With Bing still just a year old, Microsoft clearly doesn't expect its revamped search offering to be able to go out there and earn a living.
But no longer a newborn, Bing will need to do more than look pretty to win parental affection. Microsoft is counting on further gains in market share, not to mention continued progress in emerging areas such as mobile search and mapping.
In its first year, Microsoft managed to go from about 8 percent market share to 12.7 percent as of June, according to Comscore. That gain is significant, although the company spent a fortune to get there using both heavy advertising and pricey distribution deals that make Bing the search engine default on new PCs from Hewlett-Packard, Dell, and others.
"Our toolbar deals played a significant role in getting us users," acknowledged senior vice president Satya Nadella, speaking at a search event here on Tuesday.
Nadella held out hope that Microsoft could gain a similar amount of market share this year but said that would be a heroic achievement. So would a gain of just a point or two be disappointing? No, Nadella told me after the event. That would also be a success.
Clearly, Nadella has gotten the memo on underpromising and overdelivering.
One big wild card out there is whether Microsoft might be able to supplant Google in any key deals, such as becoming the search provider for AOL (That deal is up for renewal and AOL has said it is looking at its options.)
"We would like to be considered," Nadella said in an interview on Tuesday.
Nadella was also vague on when Microsoft might actually see profit from the search unit, suggesting that CEO Steve Ballmer or unit head Qi Lu would be the best ones to address that question.
Clearly one big task for Nadella and team will be the integration with Yahoo under the search partnership reached last year. This fall, Microsoft is due to start supplying both algorithmic and paid search results for Yahoo's site, though Nadella said that the companies are further along on the former than they are on the latter front.
"All our day jobs are really that," Nadella said during Tuesday's event.
Opening up a dialog
As for Bing itself, much of Microsoft's work centers on what top lieutenant Harry Shum refers to as building a "dialog model" with users.
"What I really want to do is get out of this mode--what I call the hit-or-miss mode--to really get into a dialog model, recognizing that queries are just inherently ambiguous," Shum said in an interview. "Intents are never really that clear."
That involves using information like a user's location, long-term history, and recent queries to help augment what ever information a user types into the search box. For example, if someone types in cam into a search bar, they might well be searching for a camera. However, if the search engine takes into account that the last search was for Toyota, then Camry would be a better bet.
Overall, desktop search results are likely to get a whole lot more local. Mobile search is already highly localized, drawing on the fact that most phones have GPS or other precise location information and the fact that people tend to want information that is right near where they are.
It's a little trickier on the PC, where the engine must decide whether to trust a user-defined location or use techniques such as reverse-IP lookup to determine where the PC is at that moment. But, even there expect more and more queries to be tailored to place.
Microsoft vice president Brian MacDonald showed a few slides of some other ideas the company considering. One image showed Microsoft adding more information to its home page, which today is dominated by the search box and a single, striking background image. MacDonald said the most likely things to make the front page would be portal-like information such as common tasks and local information like traffic, news, and weather.
The company isn't committing to that change, he said, but added that the slides he showed were certainly ideas he hoped made it past internal and focus group testing.
"I put in the ones I'm rooting for," he said, in an interview
Meanwhile, the coming year should also see a lot of work on tapping real-time trends to better understand user intent. Social sites like Twitter and Facebook offer a potential gold mine, as evidenced by the fact that all the major search engines have tried to tap those sites. However, real-time feeds are also noisy and no engine has really found a good way to yet cut through that clutter.
Semantic search--that is better understanding the linguistics of queries, is another area of opportunity. Microsoft bought a company called Powerset and has begun to incorporate its technology into Bing.
"In the past there has been a lot of false promise," Shum said, referring to semantic search in general. "People got very excited about a lot of semantic technology. So far we have not seen very effective use of those technologies, but I think we are pushing for this."