Microsoft Bing, Google Battle Hints at Intensifying Search Competition

Microsoft and Google's crossfire this week over Bing illustrates the importance both companies place on their online offerings.

Any doubts about Microsoft's seriousness in its online efforts should have been dispelled this week, after the company lashed back at Google's accusations that Bing, Microsoft's search engine, copies its Web-search results.

"I didn't expect that Microsoft would deny the claims so strongly," Google Principal Engineer Matt Cutts wrote in a Feb. 3 posting on his personal blog. "One comment that I've heard is that -it's whiny for Google to complain about this.' I agree that's a risk, but at the same time I think it's important to go on the record about this."

The tussle began Feb. 1, when the blog Search Engine Land published details of what it called Google's "sting operation" against Bing. Google executives claim they grew suspicious of how closely Bing's search results mirrored their own, and, after finding terms with no matches on either search engine, created "honey pot" pages that appeared on the top of search results for those terms. When a small portion of Bing search results seemed to mirror Google's forced pages, the latter began leveling accusations.

"To me, what the experiment proved was that clicks on Google are being incorporated in Bing's rankings," Cutts wrote in his blog. "Microsoft is best company to answer the degree to which clicks on Google figure into their Bing's rankings, and I hope they clarify how much of an impact clicks on Google affect Microsoft's rankings."

Microsoft claims that Bing is merely leveraging data fed by users of Bing Bar and similar applications. "In simple terms, Google's -experiment' was rigged to manipulate Bing search results through a type of attack known as -click fraud,'" Yusuf Mehdi, senior vice president of Microsoft's online services division, wrote in a Feb. 2 posting on the Bing Community blog. "As we have said before and again in this post, we use clickstream optionally provided by consumers in an anonymous fashion as one of 1,000 signals to try and determine whether a site might make sense to be in our index."

Mehdi also seemed intent on stirring the already-roiled waters a bit more. "In October 2010, we released a series of big, noticeable improvements to Bing's relevance. So big and noticeable that we are told Google took notice and began to worry," he wrote. "Then, a short time later, here come the honey-pot attacks. Is the timing purely coincidence? Are industry discussions about search quality to be ignored? Is this simply a response to the fact that some people in the industry are beginning to ask whether Bing is as good or in some cases better than Google on core Web relevance?"

Bing has made slow but steady gains since its summer 2009 launch, but its 12 percent U.S. market share (as of December, according to research firm comScore) does not present an existential threat to Google's 66.6 percent. Bing also powers back-end search for Yahoo, whose share stood at 16 percent. Even if you combine its share into Bing's, however, the audience for Microsoft's search engine remains half that of Google.

"I don't know how old I will be when that'll happen," Microsoft CEO Steve Ballmer told an audience in March 2010, during the Search Marketing Expo in Santa Clara, Calif., when asked if and when Bing would overtake Google in search.

Whatever the future holds, Microsoft seems determined to spend whatever it takes to keep Bing viable. For the quarter ended Dec. 31, the company's Online Services Division suffered operating losses of $543 million, a significant downtick from the $463 million burnt during the same quarter in 2009. That contributes to total losses of $1.1 billion for the second half of 2010.

Microsoft also has yet to see substantial profits from cloud-based initiatives such as Azure. Over the next few quarters, the company will release cloud-based products, including Office 365, designed to fit a variety of business needs-and counter Google's aggressive push into that area with offerings such as Google Apps.

Given Microsoft's intensifying focus on online services and the cloud, and Google's continued presence in those areas, a little verbal back-and-forth between the two companies' executives is only to be expected. The vitriol of this latest salvo, though, hints at just how much both Microsoft and Google have riding on their respective properties.