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January 25, 2007 4:40 PM PST
Microsoft 'not happy' with search results
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Microsoft is continuing to lose market share in the search business to industry rival Google, something the software maker's financial chief said Thursday he is "not happy" about.
And things aren't expected to turn around any time soon. Microsoft said Thursday that its Internet services business will produce less sales growth over the next two quarters than the company had previously forecast.
Where it once forecast that revenue might grow by as much as 11 percent, the company now sees full-year sales growth in its Internet services business of just 3 percent to 8 percent.
"Success continues to elude Microsoft in this market," Technology Business Research analyst Allan Krans said in an e-mail interview. He said Microsoft is hardly alone, with other rivals also struggling to keep pace with Google.
"Given Google's large head start in the market and its ongoing momentum, we think it will be very difficult for Microsoft to have a real impact in the online search market during 2007," Krans said. "However, Microsoft continues to take a long-term approach to this market, and plans to keep the investment dollars flowing into its ad business."
Microsoft has been investing heavily to try and grow its ad-backed businesses, aiming to build a second Windows Live brand to sit alongside its MSN business. In recent years, the company has shifted to its own technology for both the underlying search engine and for paid search.
The shift from Yahoo's Overture engine to Microsoft's own AdCenter paid search system has had a particularly strong impact, with Microsoft taking a hit in the amount of revenue the company derives from each search query. The company is also losing ground in terms of overall share of the search market.
A report on December Internet traffic from ComScore Networks showed Microsoft losing half a percentage point of market share in U.S. Web queries, down to 10.5 percent. Google and Yahoo both posted gains, to 47.3 percent and 28.5 percent, respectively.
"On the search side you are correct we lost market share," Microsoft CFO Chris Liddell said in response to an analyst's question on the company's earnings conference call. He said he is "clearly not happy with that."
Liddell said Microsoft continues to "take a long-term view of this business" and that the company is making progress in some areas. The company also hopes this year to turn the tide in its revenue per search query. "We still expect to get revenue per search equal to where we were a year ago by the end of this year," he said.
Other parts of Microsoft's advertising business are doing better, he said, pointing to the display advertising business.
"Clearly there is a better story on the display side," he said. "We are growing broadly in line with the market...We're comfortable with the progress we're making there."
The company is investing billions in its advertising business, but the company's forecast Thursday shows it meeting overall financial goals only because of better than expected strength in its core Office and Windows franchises.
Microsoft appears committed to growing the business organically, Krans said, adding that he doesn't believe the company will buy Yahoo, a prospect that has been the subject of on-again, off-again rumors.
"Although the company does acquire, most of Microsoft's purchases are smaller-scale, tuck-in acquisitions that fill gaps in current product offerings," Krans said. "Yahoo's current market cap is $38.37 billion, which would be a large purchase even for Microsoft."
See more CNET content tagged:
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It was so successful in the OS market that it has been typecast to that market.
When people think of the Internet and Internet services it is Google that comes to mind because Google is an Internet company and Microsoft is an OS company.
Coca Cola would have the same problem if they started selling cars.
Have you noticed how much Windows copies the Internet.
Internet has search & live feeds, so Windows copies that feature.
Microsoft is so desperate to kind of merge Windows and the Internet, but it isn't working.
One day people will realise that Windows is irrelevant.
The real platform is the Internet and the devices to access that platform are called smart devices.
The OS is fast becoming commodity. All you really need is a browser and good input and output ability.
The future belongs to companies that provide good services. Google comes to mind, but Microsoft doesn't.
I use several browsers... though I use firefox the most... because I am hooked on certain plugins... like smoothwheel.. make the plugins compatible and give me a standard user interface.... and the fastest engine with the best standards coverage.... and I will end up searching msn.... personally I could care less were I search (as long it loads super fast)... I find the search sites to be similiar enough most of the time.. nowadays..
maybe they need some sort of apple sherlock thing.. oh, they cant legally get away with that.. oh well... i guess we have to let lawyers design software.. and index the web
it is sad when i have to go to yahoo to obtain my results. it almost seems that the microsoft search engine is incomplete. it does find some stuff but still gives you a whole lot of unrelated results as well.
This, compounded by an autocratic tyrannical attitude from MSN staff over user-generated content, probably in an attempt to monetize that content more effectively (at the cost of loyalty.)
Microsoft seems to have forgot that they are no longer Microsoft: they are no longer the central force of the industry (although they remain a large player and influencer); unless they get their act together they will, over time, be relegated to the role of provider of the thing that boots and takes time until it finally recedes in the background to let the user free to work and play on the web: a byway, no more.
belly up...
The most irritating thing a about Google are totally irrelevant hits ranked on top. If I enter a manufacturer's name and product code, I expect the maufacturer and the information page (data sheet) to be listed first. Unfortunately, that information is often totally absent on Google.
(One thing: Google does have a way to complain about missing URLs or irrelevant hits.)
Google Aps make MS Office irrelevant.
Google buys Ubuntu and creates GUBUNTU.
Google Search is integrated into GUBUNTU.
Microsoft DIES(no need for expensive hardware updates, insecure and crappy OS)
- Do not under estimate
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by kalodev
January 27, 2007 11:38 AM PST
- Live search results are much better than msn search results and almost as good as google's. Do not under estimate Microsoft, they are capable, of re-writting everything again and again till they get it right...they have done it before...
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