Microsoft CEO Ballmer Digs at Google, Suggests Bing Challenges

Microsoft CEO Steve Ballmer poked Google in the ribs during a talk at Microsoft's Financial Analyst Meeting, but suggested Bing faces substantial challenges in the search-engine space.

Microsoft CEO Steve Ballmer used a July 29 talk at his company's annual Financial Analyst Meeting to poke Google in the proverbial ribs. Despite that nudging, he also acknowledged that Microsoft's own search engine, Bing, lags behind its rival in search-engine market share.

"I was flattered to see that our visual differentiation has been a source of concern to Google," Ballmer told the assembled analysts, referring to the Bing landing page's colorful backgrounds, "to see them emulating us in some ways. I guess that's a form of flattery."

Nonetheless, he added, "We're not confused. We've got a lot of work to do here. We're not confused that investors see the big price tag to get into this business and say, 'What's the progress going to look like on that?'"

Although Bing has experienced steady user gains since its launch in summer 2009, its 9.85 percent market share in the United States-as calculated by research firm Experian Hitwise-lags far behind that of Google at 71.65 percent. Microsoft's revenues for its Online Services division rose last quarter to $565 million, but it also faced a steepening quarterly loss of $696 million.

"So we're pushing ahead," Ballmer said. "I can't tell you that there's a point on the imminent horizon in which you can expect the business results to flip, but I can tell you to expect to continue to see really interesting work. We've got a lot of brand buzz."

Instead of challenging Google directly in the realm of traditional keyword search, Microsoft has chosen to devote resources on what one executive called "nontraditional areas" such as event-driven tasks and commercial queries. In terms of hard data, that strategy may be paying off: Hitwise previously reported Bing's strong growth in a number of vertical industry categories, with the percentage of U.S. upstream traffic sent from Bing to travel, shopping, automotive and health care sites increasing by double- or triple-digit percentages over the course of the past year.

"As we look at how people are using the Web itself and how the Web is changing, we think we can expand that which people do with these engines," Bing Director Stefan Weitz said to eWEEK in March. "The more exciting place, and the place we're looking at more often, is how we expand the art of the possible in search."

Bing recently expanded that strategy to mass media, with the June appearance of an Entertainment tab that directs users to searches and information about music, movies, TV, games and video games-including the ability to listen to songs via Microsoft's Zune service or play casual games for free. Ballmer's comments at the Financial Analyst Meeting suggested that the move may have been to appeal to a specific demographic set.

"If you look at the people who use Bing today," he said, "it is a younger crowd on average than ... anybody else's search engine. It's been amazing to see where the pickup and appeal has been."