Bing Grows Into A Bigger Pimple On Google
Slowly but steadily, Microsoft Bing has become a potent threat to Google in the search market. Over the last few months, Microsoft’s aggressive strategy with Bing has started to yield market share gains over competitors Google, Yahoo and AOL in the U.S. search market. Bing’s market share, which was around 11% in September 2010, is now close to 14% as of February 2011.
While the trend is a positive for Microsoft, Bing actually accounts for less than 1% of our $31.64 price estimate for Microsoft stock, which stands about 25% above market price. Below we discuss a few initiatives that Microsoft has undertaken that have sparked an increase in Bing’s U.S. search market share.
Yahoo Queries Will Improve Bing Search Results
In August 2010, Bing began powering Yahoo searches. The move gives Microsoft access to Yahoo’s search queries, which can help improve the technology powering Bing and ultimately yield improved search results. According to the terms of the 10-year search partnership, Yahoo will use Microsoft’s search technology and receive 88% of search revenues generated through its own sites during the first five years (see Microsoft’s Deal with Yahoo Could Hurt Google’s Stock).
Bing’s Partnership with Facebook
Microsoft Bing partnered with Facebook to display search results related to social networking. This move is expected to generate more Bing-powered searches as Microsoft leverages Facebook’s user base of over 500 million. The partnership provides users with more personalized search results, which may turn out to be better for certain types of searches. For example, when a user is searching for a movie on Bing, he could see results that include how many Facebook friends “liked” the movie (see Social Search with Bing-Facebook Combo a Threat to Google’s Stock).
LinkedIn has over 100 million users, and is preparing for an aggressive IPO. I discussed their dominance, though it was a hoax, here: LinkedIn acquisition plans
Bing’s Partnership with Nokia
Microsoft recently reached an agreement in which Nokia will adopt Microsoft’s Windows Phone 7 smartphone operating system for its phones. This move will lift Microsoft’s search market share as Bing will be the default search engine on Nokia phones. Nokia has a large presence in emerging markets, which is also attractive to Microsoft.
Hello Google, what have you got for us??? Anyone care to tell us what’s coming?
