September 26, 2007 9:01 PM PDT
Newsmaker: Microsoft's new search guru talks strategy
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There is a perspective that you guys have perhaps pushed search as much as you can on the base of users that you have--it's integrated in every possible MSN thing. Is the gaining really to be had among the people that are already using MSN, or have you tapped them pretty well, and you actually need to gain more users?
Nadella: Our data shows we have a higher share of users than our search share, and they use multiple search engines. So, it's not primarily a switching issue; it's an issue of a product and the experience being compelling enough to earn a higher share of their searches.
So, I would say I get your feedback, I get your comment, but my only comeback on that one would be that there is a little bit of a perspective here about, hey, we've been in this game for four years, and we've been trying to get to a place where our search experience is, one, good, and has differentiation. We feel like we've gotten to a point where last year's release got us to a good state and we're able to compete, and this year we will get that to even be further.
Then the other thing I would say is our own network in MSN--I talk about 70 million users, whereas MSN has 500 million unique users a month. So, even within our own network, if our product and our experience improves, people will probably not type in Google.com. So, that's another opportunity as well.
It seems like you might be able to have a conversation around the differentiation points, but you'd have a tough time winning over general search queries just by catching up.
Nadella: Whenever I look at my traffic, I look at the people who do a search query and abandon our search engine and go somewhere else. So, that's kind of where I feel if we get to a place where people find what they are looking for on our search engine, they will keep coming back.
And when you think about shopping, entertainment, local and health searches, they will add up to a substantial portion of the general Web queries where we will have more differentiated experiences as well.
When we have a conversation a year from now, what types of results do you expect to be able to have shared? What are some markers that we can say a year from now, if you've done this, this and this, you've been successful?
Nadella: I think at the end of the day we absolutely think market share is an important metric. So, from a year from now I believe that MSN searchers, basically the 70 million and even the 500 million unique users that MSN has, will be searching more with us.
What are your plans in terms of marketing?
Nadella: Our core priority for the fall will be on the network on MSN. Obviously the word of mouth and the engagement and the satisfaction of the customers who are doing those searches are going to be a critical factor.
So, it sounds like the primary audience or effort is basically the people that you reach already and not so much the people that aren't using Microsoft in some way or another today?
Nadella: That's right. We want to be able to break through to them about the core relevance of our search experience, and also to show value and differentiation in some of these high interest domains.
I just want to make sure I understand. The new features and improvements you showed us today, many of which seem to really just catch up to what others are already doing, are going to be enough in your opinion to get those Microsoft network users, who are using other search engines and not Microsoft, or who are using other search engines in addition to Microsoft, to stop using those other search engines?
Nadella: Yes. The improvements in core relevance and the differentiated features in mobile search, image, video, shopping, health and entertainment, do create both the combination of being caught up, plus differentiated features that will cause those users to do more searches with us.
I've asked this question before, but to make sure that I'm understanding the answer, is it the case that you think you'll gain significant share without being better at the core? The features you showed on the core side were all features that Google has today. Don't you have to be better at the core to win?
Nadella: I do believe that there will be classes of queries where we will be marginally better in the core, and I would say our goal would be to keep at it, and as I said, this is a continuous game, so therefore we feel confident.
The fact that we caught up with somebody who was sort of the leader in the industry and started a lot before us should give us hope that we can do even better. But do I say that that would be the only time we'll gain the first point of share? I don't believe so, because one, we've proved that we can even gain share.
Let's sort of forget for a second that we lost share first. If I look at what we have done on the engagement side with the Live Club, and all these differentiated features we have, in addition to the core, I believe we can gain share.
Will we be No. 1 instantly because we just caught up? That's a very debatable point. But at the same time, do I believe that we can do better than our current share position, given that we have these 70 million users and these 5 million users and (are) giving them a better search experience than the alternative? I believe so. 
See more CNET content tagged:
Satya Nadella, Microsoft Windows Live, market share, MSN, traffic
I Googled (I mean I "Lived") my name - First Name space Last Name. First hit on Live: A blog in Japanese, where the name of the blog was a concatenation of last name first name. The same search on Google, gives the familiar sites where I (and my son, who shares my same name) have posted regularly.
Sorry, Live.Com, you're still third best.
LOL, somebody has a serious branding problem...
"In some sense it's perhaps not the position we'd like to be in, but we are in a position where quite frankly we have nothing to lose. We want to be able to come out, take some risks, do some innovation, get to a place where we have parity on some of the table stakes, and differentiate. The 70 million users we have is a substantial number, and if we can get them to do more searches, we will have gains"
Good strategy!
I've given Live Search a very fair run, but the fact is, Google usually has better results. Nothing else is important, if basic search isnt excellent.
IMO, the majority of this share of their market is the clueless IE users who can't change their default settings. Curious.
Based on the astronomical number of hosed up Windows machines on the Internet, I would have thought this number would be higher.
Habits are hard to break, and ones and even harder are good habits. For search purpose Google is a good habit. Why should anyone break their Google habit for the Microsoft search habit?
thoughts and a few points of view, all my own work.
Like beware of the ponderous monster, that walks
clumsy, but with a big THUMP.
They took over the OS from IBM
They took over the browser from Netscape
They took over the Server from Sun
They took over Networking from Novell
They took over Audio from Real*
They took over Messaging from AOL
They took over PS3 from Sony with Xbox
They have seeded 500 million PCs with IE and Outlook. How long before, they start loading these 500 million habitual sheep with MSBSearch. Gradually, but surely, the boa constrictor will tighten its coils.
Think about it.
the same thing about Altavista. The used to say the same thing
about Yahoo. Maybe you don't remember Altavista or Lycos but
they were he 800 pound gorillas. Then Google provided a better
product and people switched. If MS can provide a better service
people *will* switch. Thats a darn big if but the possibility is there.
I think they would have to pay a lot of money in order to make it successful.
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