Microsoft/Google Competition Heats Up With Launch of Bing Search Engine

By , Money Morning •

By Bob Blandeburgo
Associate Editor
Money Morning

Microsoft Corp.'s (Nasdaq: MSFT) much-ballyhooed "Google Killer" - a powerful new search engine called Bing - was formally unveiled to the public Monday, two days before its scheduled debut.

Bing was originally supposed to have debuted today (Wednesday).

Bing will represent Microsoft's third attempt at developing a go-to search engine in the last 10 years. But the stakes have arguably never been higher. The software giant has watched over the past 11 years as Google Inc. (Nasdaq: GOOG) parlayed its targeted ads business into a dominating 64.2% of the Internet-search market. As of April, Microsoft's market share in search was a relatively paltry 8.2%.

While Microsoft won't say so publicly, the high-tech behemoth is clearly hoping to transform the product name into a synonym for search in order to achieve the Internet ubiquity that Google has enjoyed for most of this decade.

To succeed, Bing must establish its own identity: If Microsoft is going to wrest any of the search market away from Google, Internet users will have to believe that Bing offers a slew of unique benefits. One such potential benefit: Bing Travel, which will predict airfare and hotel rates based on the time of year, ensuring users get better results. Microsoft gained this technology from its $115 million acquisition of travel Web site Farecast last year.

"I think the benefits are subtle," Gartner Research (NYSE: IT) Vice President Andrew Frank told Computerworld. "I don't think [those benefits] jump right out at you when you first start using it. It takes a while to appreciate the difference and I think the difference is a lot more pronounced in certain categories, like travel. Microsoft has focused on some specific categories, especially for 'decision uses,' as they call it. But you have to happen upon a lot of this to discover it."

Backed by a $100 million ad campaign that's being engineered by New York-based ad agency JWT, savvy consumers can soon expect to see the Bing brand plastered almost everywhere: online, on TV, on the radio and even in print. According to AdAge and Wired, the campaign will pose a key question: Do current search engines really solve your problems?

Google appears poised to defend its Internet-search-market share by integrating its powerful search engine capabilities into new products. Aside from evolving its search engine with more options (try clicking the "show options" link after searching with Google), products such as Google Earth, Google Chrome and its newest product, Google Wave, will all tie back to its lucrative search engine.

Interestingly, Chrome is Google's attempt to take market share away from Microsoft's Internet Explorer web browser, which itself held a monopoly-like market share in excess of 66% as of April. Wave, due to launch in the next few months, is Google's attempt at an all-in-one collaboration tool - somewhat akin to Microsoft Outlook - which integrates its Gmail service with instant messaging, wiki, and social networking.

Before Microsoft can capture Google's search throne, it will face hurdles from other competitors, particularly Yahoo! Inc. (Nasdaq: YHOO), which failed to seal a deal to be acquired by Microsoft. Yahoo currently holds 20.4% of the search engine market.

In related news, Bloomberg News reports that Google will bring its Android operating system to "netbook" laptops in an attempt to take on Microsoft's firmly entrenched Windows.  Taipei-based Acer, Inc., the world's second-largest laptop manufacturer, will release the first Android netbooks in the next quarter.

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