SAI reports that Bing
increased its market share from 8.4% to 8.9% (about 5% increase) last month:
ComScore released its July search query data today, JP Morgan's Imran Kahn says in a note. It says:
- Google's share was 64.7%, down from 65.0% in June
- Yahoo's share was 19.3%, down from 19.6% in June
- Bing's share was 8.9%, up from 8.4% in June
This means Bing has gained 90 basis points of market share in two months -- or a 11% market share gain. This is not terrible, but not a remarkable success, given how much Microsoft has been advertising it. Bing was supposed to be a big game-changer for Microsoft, and so far, it isn't. We'll have a better idea of Bing's longer-term success in a few months.
Au contraire, if they can grow at 5% a month for a year or so, that is quite scary for Google. Think of it as a tank parked on their lawn that is getting bigger...and Bigger....and BIGGER.
As we
pointed out awhile ago, this is Microsoft's strategic response to Google's attempt to nail Microsoft in it's own backyard of operating systems. officeware and browsers with Chrome et al.
A few weeks ago there was a rather good article on the GYMA club's competitive positions, in the WSJ called
"Techdom's Two Cold Wars" which looked at in terms of Game Theory / International Relations:
Why didn’t the U.S. and the USSR just ignore each other and save themselves the cost of an arms race? Answer: Each had the potential to do such serious damage to the other, they dared not risk it.
Microsoft and Google also have the power to damage each other, and are better off if they don’t. They too spend a lot of money on deterrence—a puzzle since both are inevitably owned by many of the same shareholders, including large mutual and pension funds. Even more than the Cold War superpowers, they have every incentive quietly to agree to be deterred without investing quite so much on an arms race.
These are thoughts designed to trouble the naïve delight of many who heard Google’s announcement last week that it intends to roll out an operating system to compete with Windows. Partisan Google fans imagine Google finally is preparing to go toe-to-toe with its nemesis. They couldn’t be more wrong.
Google might do so if Microsoft were unilaterally to disarm in some way. That’s not going to happen. Microsoft merely is being reminded that its fat Windows margins are vulnerable to attack.
Microsoft sent the parallel message to Google when it spent millions to launch Bing, a new search engine that’s receiving good reviews even from Microsoft haters. Bing, Microsoft hopes, will finally prove a weapon that can seriously threaten Google’s margins, though only to keep Google from raiding Microsoft’s.
By the way, there was another paragraph on the Apple front:
Naturally, the fondest wish of both companies’ shareholders is that they find a cheaper way to deter each other, or better yet strike a cease-fire. In short, they wish Google and Microsoft would reach the kind of condominium that Google and Apple have reached.
For, whatever the advertised purpose of Google CEO Eric Schmidt’s presence on Apple’s board, the obvious purpose is to manage competition between the two companies. Of all the dabbling Google has done, notice that it hasn’t dabbled in music-playing software, in cataloging music files (though Google says its mission is to “organize all the world’s information”), or even in allowing users to create playlists of YouTube music videos. Google’s dabbling has been restricted to markets where Microsoft, Nokia or others are dominant, not where Apple is dominant.
How long the Apple-Google cold peace can last is, in some ways, a more interesting subject than the latest dustup between Google and Microsoft.
This was before Schmidt resigned from the Apple board, which - in the above terms - looks like a withdrawal of Ambassdors as a prelude to hostilities.
It does rather look like Google is committing itself to a war on 2 fronts - and potentially 3 if a revitalised Yahoo comes back into the fray (and the Yahoo-Microsoft alliance tells you whose entente is cordiale). Now any strategist can tell you fighting on 2 fronts is hard, and fighting on 3 is near impossible. (Just ask one N. Bonaparte). But, to further the military analogy, after several years of Google advances, Bing is the first landing of the Microsoft marines into Fortress Google turf. It remains to be seen whether its Dieppe or D-Day, but its a sign of the turning of the strategic tide.
