- Related Stories
-
Microsoft sales unharmed by Vista delays
January 25, 2007 -
Microsoft takes plunge with AdCenter
May 3, 2006 -
Microsoft's ad pitch underpins Net moves
November 11, 2005
Microsoft is continuing to lose market share in the search business to industry rival Google, something the software maker's financial chief said Thursday he is "not happy" about.
And things aren't expected to turn around any time soon. Microsoft said Thursday that its Internet services business will produce less sales growth over the next two quarters than the company had previously forecast.
Where it once forecast that revenue might grow by as much as 11 percent, the company now sees full-year sales growth in its Internet services business of just 3 percent to 8 percent.
"Success continues to elude Microsoft in this market," Technology Business Research analyst Allan Krans said in an e-mail interview. He said Microsoft is hardly alone, with other rivals also struggling to keep pace with Google.
"Given Google's large head start in the market and its ongoing momentum, we think it will be very difficult for Microsoft to have a real impact in the online search market during 2007," Krans said. "However, Microsoft continues to take a long-term approach to this market, and plans to keep the investment dollars flowing into its ad business."
Microsoft has been investing heavily to try and grow its ad-backed businesses, aiming to build a second Windows Live brand to sit alongside its MSN business. In recent years, the company has shifted to its own technology for both the underlying search engine and for paid search.
The shift from Yahoo's Overture engine to Microsoft's own AdCenter paid search system has had a particularly strong impact, with Microsoft taking a hit in the amount of revenue the company derives from each search query. The company is also losing ground in terms of overall share of the search market.
A report on December Internet traffic from ComScore Networks showed Microsoft losing half a percentage point of market share in U.S. Web queries, down to 10.5 percent. Google and Yahoo both posted gains, to 47.3 percent and 28.5 percent, respectively.
"On the search side you are correct we lost market share," Microsoft CFO Chris Liddell said in response to an analyst's question on the company's earnings conference call. He said he is "clearly not happy with that."
Liddell said Microsoft continues to "take a long-term view of this business" and that the company is making progress in some areas. The company also hopes this year to turn the tide in its revenue per search query. "We still expect to get revenue per search equal to where we were a year ago by the end of this year," he said.
Other parts of Microsoft's advertising business are doing better, he said, pointing to the display advertising business.
"Clearly there is a better story on the display side," he said. "We are growing broadly in line with the market...We're comfortable with the progress we're making there."
The company is investing billions in its advertising business, but the company's forecast Thursday shows it meeting overall financial goals only because of better than expected strength in its core Office and Windows franchises.
Microsoft appears committed to growing the business organically, Krans said, adding that he doesn't believe the company will buy Yahoo, a prospect that has been the subject of on-again, off-again rumors.
"Although the company does acquire, most of Microsoft's purchases are smaller-scale, tuck-in acquisitions that fill gaps in current product offerings," Krans said. "Yahoo's current market cap is $38.37 billion, which would be a large purchase even for Microsoft."
See more CNET content tagged:
paid search, market share, query, search result, Yahoo! Inc.
It was so successful in the OS market that it has been typecast to that market.
When people think of the Internet and Internet services it is Google that comes to mind because Google is an Internet company and Microsoft is an OS company.
Coca Cola would have the same problem if they started selling cars.
They rule the desktop because (IMO):
1. They produced a "good enough" operating system (utilizing the best ideas of a lot of other people), then
2. were brilliant in marketing it.
Now, unfortunately for them, they are venturing into areas where they have to compete on the merits of their products. And the Microsoft name means very little and may even be a liability in some cases.
These days, in many people's minds, Search = Google, Music = Apple, Viruses = Microsoft.
I also agree that many look at MS as an OS company ,not search. I think this is due to MS forcing it on people, not being as good a search engine so people look at it as a second rate, quick fix for searching until better comes along. One fact that irritates me is that MS includes the ratings of people who use MS to download Windows updates, well, what choice do we have? You can't use Firefox to do this. If not needed for updating, where would the statistics lie then? I would think this is forcing people to use MS services.
Lastly, let's not forget what browser is typically linked to MS searches. Yep the IE, the browser that so many have gotten spyware from, the unsafe, slower browser. Windows+IE+MSN = disaster in many eyes. Ok, so IE7 is more secure than 6, fine, it looks better too, fine, it's slower than 6, yes. When you have so many who associate MSN+IE, what do they think will happen to their search status? They forced this 3 ring combo on us for so long, now it's biting them. I still cringe at the thought of going into IE and using it at all. They have a lot to prove and improve before i'll ever use that combo again.
Paul
Have you noticed how much Windows copies the Internet.
Internet has search & live feeds, so Windows copies that feature.
Microsoft is so desperate to kind of merge Windows and the Internet, but it isn't working.
One day people will realise that Windows is irrelevant.
The real platform is the Internet and the devices to access that platform are called smart devices.
The OS is fast becoming commodity. All you really need is a browser and good input and output ability.
The future belongs to companies that provide good services. Google comes to mind, but Microsoft doesn't.
If Windows is or is not the best Operating System for all that is open to debate, but just because YOU don't use anything other than the browser doesn't mean that people with more productive lives don't.
I use several browsers... though I use firefox the most... because I am hooked on certain plugins... like smoothwheel.. make the plugins compatible and give me a standard user interface.... and the fastest engine with the best standards coverage.... and I will end up searching msn.... personally I could care less were I search (as long it loads super fast)... I find the search sites to be similiar enough most of the time.. nowadays..
maybe they need some sort of apple sherlock thing.. oh, they cant legally get away with that.. oh well... i guess we have to let lawyers design software.. and index the web
this time? Your program still needs more tuning. Good luck with
that.
Have a nice day!
it is sad when i have to go to yahoo to obtain my results. it almost seems that the microsoft search engine is incomplete. it does find some stuff but still gives you a whole lot of unrelated results as well.
shouldn't be sad to use the one that can.
I hope you don't get emotional over your choice of screwdrivers :-)
This, compounded by an autocratic tyrannical attitude from MSN staff over user-generated content, probably in an attempt to monetize that content more effectively (at the cost of loyalty.)
Microsoft seems to have forgot that they are no longer Microsoft: they are no longer the central force of the industry (although they remain a large player and influencer); unless they get their act together they will, over time, be relegated to the role of provider of the thing that boots and takes time until it finally recedes in the background to let the user free to work and play on the web: a byway, no more.
belly up...
The most irritating thing a about Google are totally irrelevant hits ranked on top. If I enter a manufacturer's name and product code, I expect the maufacturer and the information page (data sheet) to be listed first. Unfortunately, that information is often totally absent on Google.
(One thing: Google does have a way to complain about missing URLs or irrelevant hits.)
Google Aps make MS Office irrelevant.
Google buys Ubuntu and creates GUBUNTU.
Google Search is integrated into GUBUNTU.
Microsoft DIES(no need for expensive hardware updates, insecure and crappy OS)
- Do not under estimate
- by kalodev January 27, 2007 11:38 AM PST
- Live search results are much better than msn search results and almost as good as google's. Do not under estimate Microsoft, they are capable, of re-writting everything again and again till they get it right...they have done it before...
- Like this Reply to this comment
-
-
- And the thing is...
- by Commander_Spock January 28, 2007 12:19 PM PST
- ...; they already have "other people's money" (yours and mine in their "war" chest) to do it with!
- Like this View reply
Processing -
- Does Microsoft ever get it right?
- by mh20932 January 29, 2007 10:46 AM PST
- They certainly rewrite their software over and over again, but do the ever get it right? The only thing they're really good at is deluding customers that the next version will fix all the problems of the previous version.
- Like this
-
(48 Comments)