Microsoft Should Have Pursued Search Sooner, Says Ballmer

Microsoft CEO Steve Ballmer, speaking at the Executive’s Club of Chicago on June 18, suggested that his company may have been a little late to the game with regard to search; publicly, however, he seemed confident that Microsoft’s new search engine, Bing, could make a solid effort against arch-rivals Google and Yahoo in the search-engine space.

“I would say start sooner on search,” Ballmer told the audience, explaining the one thing he would choose to do over.

“We had no business model in mind,” he added with regard to the search market. “So we were slow to move and slower to invest in it. We should have started earlier.”

With the release of Bing, which provides traditional search results in addition to the ability for users to drill down into specific subject categories such as shopping, Ballmer feels that Microsoft can gain market share on Google.

“We’ve got our mojo going now,” Ballmer said. “We’re the little engine that could.”

Bing performed strongly in the few weeks after its June 1 rollout; research firm comScore reported that the site’s daily penetration among U.S. searchers increasing to 16.7 percent by June 12. During that period, Microsoft’s share of search results pages in the United States increased to 12.1 percent.

Microsoft has been pouring the equivalent of a small country’s GDP into its Bing promotional effort, with an advertising budget of between $80 million and $100 million, according to The New York Times. In addition to traditional advertising, Microsoft has also been trying more unconventional avenues, such as paid content through online-video site Hulu.com.

While an early report by StatCounter soon after Bing’s rollout, suggesting that the site had already overtaken Yahoo by more than six points in U.S. market share, was disputed by Nielsen and other firms, more definitive data suggested that Microsoft’s share of the pre-Bing search market had been dropping.

According to a June 16 report by Nielsen, the number of people conducting online searches via Microsoft’s sites had dropped by 14.6 percent between May 2008 and May 2009. By contrast, year-over-year growth for Yahoo and Google had reached 22.3 and 28.2 percent.