September 26, 2007 9:01 PM PDT
Newsmaker: Microsoft's new search guru talks strategy
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The company has anywhere from a 8 percent to 13 percent market share in the United States, depending on who is collecting the traffic data, putting it behind Yahoo (20 percent to 23 percent share) and far behind Google (54 percent to 64 percent share). And Microsoft's share seems to be slipping, nearly 4 percentage points from a year ago, according to Hitwise.
How does Microsoft propose to narrow the gap? Earlier this year, the company launched a program called Microsoft Search and Win that rewards people for using the Live Search site. The program bumped up Microsoft's market share this summer. But while compensating people to use your search engine may provide a temporary market share increase, it isn't a good long-term strategy to build market share.
Microsoft is hoping that it can catch up to rivals in overall search and find a few key areas where it can go into more depth, by offering tailored searches. For now, it is eyeing celebrities and entertainment, product searches, local search and health care as fertile areas worth having specialized results.
CNET News.com talked to Satya Nadella, corporate vice president of search and advertising at Microsoft, about how the company plans to improve its market share and improve search for the long haul shortly before the company launched new features in its Live Search site at a "Searchification" event Wednesday.
Q: How much of your search traffic is coming from search embedded within other Microsoft Internet properties versus people going directly to the main Live.com search page?
Nadella: The search bar on MSN is where we get a lot (of traffic), and we do get even a bunch from people who choose to use us as the default provider on their browser, as well as people who install our toolbar. So, those are the top three sources.
Some folks have said it's about 1 percent of your traffic that comes from people typing in the Live.com Web address?
Nadella: That's probably true. We've not really marketed Live.com. In fact, we've really focused, even with this release we'll be very, very focused on basically having the Live search experience power MSN, and that's a fairly explicit strategy of ours, if you will, because we feel that that's the place where we can gain a lot by showing a better search experience, and getting the customers and the consumers who are doing searches with us on top of MSN to do more.
So, you're not going to be trying to narrow the gap with Google and even Yahoo on just general Web search and trying to attract people to Live.com?
Nadella: Yahoo is very much like MSN. People type in Yahoo.com, and they go to a portal, and MSN is one such portal, so it has search, and we'll keep innovating on how to highlight that. Whereas when we think about Google as just a destination site, we have that with Live, and we think that with Windows Live and other places we'll start building some organic traffic. But I would say that in the fall you will see us, just because these 70 million users today are our lowest hanging fruit in terms of being able to increase the engagement with them, that we will put a lot of energy in just marketing ourselves through MSN.
Microsoft has turned to paid programs, either direct-to-consumer promotions or promotions with businesses, in the last year to gain share, or really recoup lost share. Is that something you expect to increase, stay level, or decrease in the coming year?
Nadella: We believe that we will sustain that. We built a generalized loyalty program/platform called the Live Search Club, which helps us raise awareness to the fact that we are in this search game and helps us get more engagement and then builds loyalty through things like prizes. We'll do more of that, and generally use this as a loyalty program going forward, and experiment with multiple ways to engage users.
What about paying businesses to use you?
Nadella: So, we have some pilots that you've seen us talk about. We will definitely move that. But I would say the core focus at least in the fall would be for the consumer push through MSN.
Some of the new features launched this week are already offered by your rivals. Is catching up really much of a game changer at this point?
Nadella: That's a good question. You have to be in the game with the core (relevance), and then you have to differentiate in these high-value vertical domains. If we have 70 million people using our search engine today, if we are getting better at core relevance, and delivering some differentiated experiences in verticals, what can our share position be?
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.
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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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