Microsoft

Microsoft's new Bing search service is the fastest-growing U.S. search engine among the top 10, according to a Nielsen report released Monday.

The total amount of searches on Bing rang in at 1.1 billion for the month of August, a leap of 22.1 percent over July, winning Microsoft a 10.7 percent share of the search engine market.

Google remained in the top spot with a commanding 64.6 percent share, accounting for 7 billion searches in August, a gain of 2.6 percent over July. Yahoo saw its search results drop 4.2 percent for the month to 1.7 billion, earning it 16 percent of the market.

Other players in the top 10 included AOL Search in fourth place with 333 million searches and Ask.com Search in fifth with 186 million searches.

Similar studies have also seen a boost in Microsoft's search business. An August report from ComScore discovered that Microsoft's share of the global search engine market lept 41 percent from July 2008 to July 2009. Bing was introduced in May, taking the place of Microsoft's Live Search.

Earlier this week, Microsoft showed off a "visual search" feature for Bing that returns thumbnail images for at least some search results. Microsoft reportedly will be debuting a Bing 2.0 sometime soon sporting a variety of new features.

The U.S. Department of Justice has furthered its investigation into the proposed search engine deal between Microsoft and Yahoo by asking both companies to provide more information.

The two companies received an additional request for information earlier this week as expected, Microsoft spokesman Jack Evans told CNET News. He said he couldn't reveal the specifics of the request, citing it as a confidential inquiry from the Justice Department. But he said Microsoft is in the process of providing the requested information.

Yahoo spokesman Adam Grossberg also confirmed to CNET News the Justice Department's request. He couldn't comment on the specifics either but added that Yahoo is cooperating fully.

"We confidently believe the information we'll provide will confirm that the deal is not only good for Yahoo and Microsoft, but also good for advertisers, publishers, and, ultimately, consumers," said Grossberg.

The request for additional information doesn't come as a surprise to either Microsoft or Yahoo.

Under the Hart-Scott-Rodino Act, mergers or other business deals that meet certain requirements must be reviewed by the government before they can close. Companies have to file the necessary paperwork with the government and then wait 30 days before given clearance to move forward. In some cases, the government requests additional information before making a decision.

Both Microsoft and Yahoo were anticipating a close review of the deal given its scope, said Evans. At a press conference when the deal was announced, the companies said the review would be a matter of months, not weeks, taking it through the fall.

Despite the Justice Department's request for more details, both Microsoft and Yahoo are hopeful the deal will close as expected in early 2010.

Still, the Justice Department is only one battle. The agreement may also require regulatory clearance by the European Commission, which has been tough in its current probe of Oracle-Sun and in past probes of both Intel and Microsoft. Microsoft is currently trying to determine what formal notification, if any, needs to occur in Europe.

But a Microsoft-Yahoo search combination may be seen as less of a competitive threat in Europe where Google enjoys a 90 percent share of the search engine market versus its U.S. share, which ranges anywhere from 63 percent to 72 percent based on recent estimates.

Yahoo and Microsoft announced the deal in July, under which Bing's search engine technology would power Yahoo Search, and Yahoo would sell ad space next to search results, with the two companies splitting the sales.

Microsoft has responded swiftly to suggestions that its Bing search engine seems to throw up ads alongside the keyword "pornography".

In a post Thursday, I outlined some of the suspicions that surrounded the appearance of ads for Bing next to searches for fleshy entertainment.

A Microsoft representative declared in an e-mail: "Microsoft has not purchased the keyword 'pornography,' and this term has never been in our AdWords account."

This will serve as a considerable relief to many upstanding citizens.

The company representative continued: "It is our policy on the Bing marketing team that we do not have any adult content as part of any of our keyword buys or other marketing campaigns."

However, Microsoft has vivid views about how this alleged relationship between "binging" and films featuring somewhat less talented actors naked might have come about.

"The keyword that seems to be triggering these results is 'free videos,'" the Microsoft representative explained. "We are following up with Google to understand why this ad is showing up in these types of queries."

That should be a very interesting conversation. One looks forward to reading a transcript.

Kai-Fu Lee, the president of Google's Greater China operation and the subject of a bitter employee custody battle between Google and Microsoft, will leave the search giant later this month.

Lee, who left Microsoft in 2005 to take over Google's operations in China, is resigning from the company to start his own venture and will be succeeded by a Google employee, the company confirmed Thursday evening. Lee's departure was first reported by the Wall Street Journal.

"With a very strong leadership team in place, it seemed a very good moment for me to move to the next chapter in my career," Lee said in a statement announcing his departure.

An expert in speech recognition technology, Lee founded Microsoft's China research lab in the late 1990s and worked at Silicon Graphics and Apple before joining Microsoft. Before joining Google, Lee had been working at Microsoft's Redmond, Wash., headquarters, focusing on new search technologies.

Google announced in July 2005 that it was hiring Lee, and Microsoft immediately filed suit in Washington state court against Lee and Google, arguing that Lee was violating a one-year noncompete agreement that was part of his Microsoft contract. Google later countersued in California court. Microsoft settled with Google in December 2005, without releasing terms of the pact.

Google put Lee in charge of its search efforts in China, with hopes of democratizing data in China. However, some three years after launching its efforts in China, the search company is still mired in an uncomfortable working relationship with government censors.

The new Bing Dynasty desperately wants you to love it.

And it understands you so well in these times of penury and desperation that it knows you have certain vulnerabilities that might be worth exploring: the vulnerabilities that lurk in the area around your pocket.

Therefore Microsoft has launched its first-ever TV ad for Cashback, a nifty system that gives you a little money when you buy something vital--such as sneakers or a camera--through a Bing search.

It does seem like splendidly commercial bribery. However, I do wish that the ad might have been a little less prosaic and a little more inspiring.

You see, if you're a decision engine rather than a search engine, you have to aspire to higher goals. It really isn't enough to produce an ad that might have been the work of JC Penney or KMart in one of their more awkward moments.

I would have preferred something that stirred the emotions, rather than something that feels like it's going through the motions.

Bribery should be alluring, not merely an everyday solution to an annoying practical problem.

Still, you know that even with this mundane execution, it won't be hard for some to decide that binging for your supper is better than singing for it.

It'll probably still be a long time before people start saying things like "I'd spend some time binging that guy before I go on a date with him," but in the U.S. things are looking up for Microsoft's new search engine, Bing, which was unveiled in May.

Web analytics firm StatCounter released analysis Monday stating that Bing slightly increased Microsoft's share of the U.S. search market in July. It now claims 9.41 percent, up from 8.23 percent in June.

The combined market share of both Microsoft and Yahoo in July was 20.36 percent, up slightly from 19.27 percent in June. The commanding lead Google currently has on the market shrank slightly to 77.54 percent in July from 78.48 percent in June.

Microsoft and Yahoo reached a deal last week, with Microsoft powering Yahoo search while Yahoo becomes the exclusive worldwide relationship sales force for both companies' premium search advertisers.

And according to StatCounter analysis, worldwide is the place where the two companies face an even bigger challenge in the search market. In July, Microsoft and Yahoo combined had just 8.77 percent of the global search market, down from 8.45 percent in June. On the other hand, Google still dominates the search market globally with 89.23 percent in July (slightly down from 89.8 percent in June).

StatCounter's data was based on an analysis of 1 billion search engine referring clicks (of which 258 million were from the U.S.) that were collected in June and July from the company's network of more than 3 million Web sites.

REDMOND, Wash.--In the wake of Microsoft's search deal with Yahoo, online chief Qi Lu outlined why the business is so important to Microsoft and how the company hopes to make headway.

For one thing, he promised the crowd of financial analysts, it can be a huge money maker.

"When you are at scale it can be a hugely profitable business," Lu said.

The problem is that many of the costs are the same even if you are not operating at scale, which is the place Microsoft has found itself. "Even if you have one user you have to crawl the whole Web."

But the challenge goes further, he said, noting that smaller players, by their nature, have fewer ads to show, meaning those ads are less relevant and the search experience is not only less profitable, but less desirable for users.

The Yahoo deal will help Microsoft in the scale arena. Combined, the two companies would have more than triple the search share that Microsoft has on its own. That said, the combined entity still has less than half of Google's share.

"With larger scales there are several important advantages," Lu said. "There is an almost immediate lift in the quality of user experience."

For example, suggested searches are based on a fairly simple algorithm, but one that gets much better the more queries a search provider sees.

But, even beyond the scale issues, Lu acknowledged that Microsoft also faces a brand challenge. He said that studies show that given a choice between Google's brand with another provider's results and Google's results with another provider's brand--users will choose the Google name, which has become synonymous with search.

"People will prefer the Google brand because of the strength it has," said Lu, who joined Microsoft from Yahoo at the end of last year.

Answering those challenges won't happen overnight, he said.

"We want to be brutally honest about where we are," he said. "It's going to take time."

Microsoft relaunched its search engine as Bing in June and has seen a slight bump in market share, though it remains to be seen whether it can hold onto and build on that initial interest.

"Overall the early feedback from the market has been encouraging," Lu said. "It's a good step, but it's the first step in a long, long journey."

Digital-ad campaigns have proven stubbornly challenging to plan and track. Microsoft hopes to change that.

The software giant announced on Thursday a new collaboration with consumer measurement firm ComScore to design a digital media-planning service dubbed the Reach and Frequency Planner (RF Planner).

The goal of the RF Planner will be to help brand advertisers better measure and track their online-ad campaigns. Advertisers would be able to more easily determine and predict how consumers will respond to their digital ads.

Microsoft says online advertisers have been stymied by the inability to measure digital-ad campaigns with the same metrics used for offline campaigns. The company points out that ad budgets for brand advertisers account for about two-thirds of the $186 million U.S. ad market. But only 5 percent of those dollars are spent on Internet advertising.

By teaming Microsoft's ad data with demographics from ComScore's research, the companies want to provide advertisers with the same tracking information they would have with an offline campaign.

"The perception that traditional branding metrics are not possible or meaningful for digital media is misguided," said Scott Howe, corporate vice president of the Advertiser and Publisher Solutions group at Microsoft. "We believe online advertising won't maximize its appeal to brand marketers until the basic metrics they've relied on for years are available in digital-media plans."

Microsoft said closed beta testing of the RF Planner will start immediately, with a select number of advertisers coming aboard.

Microsoft has been pushing for a greater foothold in the online-ad game. Thanks to Wednesday's agreement with Yahoo, the company gains a bigger chunk of the search market, potentially translating into healthy advertising dollars.

After months of Microhoo maneuvering, the two companies sign the dotted line on a deal that puts Yahoo search in Microsoft's hands.

With Yahoo search gone, content becomes king

What kind of company will Yahoo be when the Microsoft search deal takes shape? A content company that will need to make hard decisions about how to attract eyeballs.
(Posted in Webware by Tom Krazit)
July 30, 2009 4:00 AM PDT

Breaking down Microsoft and Yahoo's search deal

It will take months to play out, but who are the winners and losers in Yahoo's decision to offload its search business to Microsoft?
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July 29, 2009 2:19 PM PDT

Microsoft, Yahoo now free to focus on new selves

The two companies have plenty of challenges now, but the ground rules have been set: Yahoo's job is to be an online hub, and Microsoft's job is to out-Google Google.
(Posted in Digital Media by Stephen Shankland)
July 29, 2009 1:22 PM PDT

Microsoft open to SearchMonkey, other Yahoo tech

In interview, top Microsoft online exec says his company likes Yahoo's open approach, but will have to see which of Yahoo's technologies make sense to add to Bing
• Podcast: What they win
• Podcast: Microsoft, Yahoo VPs explain deal
(Posted in Beyond Binary by Ina Fried)
July 29, 2009 9:51 AM PDT

Hello Godot: Microsoft, Yahoo finally hook up

One of the most on-again, off-again technology partnerships in recent memory has finally been consummated. How did we get here, and why now?
(Posted in Webware by Tom Krazit)
July 29, 2009 6:10 AM PDT

Yahoo, Microsoft reach search, ad deal

Under the pact, Microsoft's technology will power Yahoo's search results, while Yahoo will handle ad-selling duties for both companies' search sites.
• Live blog: Microsoft, Yahoo discuss deal
(Posted in Beyond Binary by Ina Fried)
July 29, 2009 4:56 AM PDT