Hot on the heels of Google's recent phone launch, Microsoft have also announced a new Internet-phone called Windows Phone 7. This has naturally received wide media coverage, including by the Sydney Morning Herald that reports on the radically redesigned operating system that will soon become a serious challenger to Apple's iPhone.

The new phone looks quite different to the iPhone and not as stylish, but since it has been designed from the bottom up and with experience of the existing systems in the market, it is said to seamlessly pull together content from social networking sites and other web services on a scale unseen on competing platforms. Previous Windows Mobile versions have been replaced by a completely new design that integrates Microsoft's Zune music player and the Xbox Live gaming service.

Using Microsoft's own operating system, the new phones are due to hit the market by Christmas this year. Samsung, HTC, HP, Sony Ericsson, Dell, LG and Toshiba have already signed up as early partners and this is clear competition for Google and the market leader, Apple.

Labels: microsoft, mobile search

The recent news that Google is considering ending its operation in China following a cyber-attack in December has led to protests from the US Government and further concerns and issues being raised about attacks on various government websites worldwide.

In Germany the government has now issued a statement warning web users to find an alternative browser to Internet Explorer to protect their security. As reported by the BBC, this comes after Microsoft admitted IE was the weak link in recent attacks on Google's systems. However, Microsoft rejected the warning, saying that the risk to users was low and that the browsers' increased security setting (which is not the default level used by most users) would prevent any serious risk.

However, this warning has now been repeated by France, which - if heeded - will cause significant damage to the reputation and market share of Microsoft's browser. In reply, Microsoft have tried to downplay the concerns but clearly wants to get more users upgraded to the newer, more secure version of Internet Explorer. However, according to Australian security experts quoted by the Sydney Morning Herald, the European concerns are 'overblown'.

Regardless of all this - and despite their issues with China - Google must be taking a secret delight at the problems Microsoft are now having to fend off which were, presumably unwittingly, caused by the original China story. If many people do move away from using Microsoft's browser, the main alternatives are Mozilla's Firefox and Google's Chrome product.

Labels: google, internet browsers, microsoft

Microsoft has announced a new feature for the recently launched Bing search engine. As reported by the BBC website, the new feature is designed to set their search experience apart from Google and will allow users to browse results using pictures instead of text.

The visual search option will initially concentrate on the four main areas where Bing has been providing specialised search options to date - namely travel, health, leisure and shopping. At the recent launch, Microsoft claimed Visual Search allowed users to conduct some searches faster than the "traditional image search" offered by rival Google and other search engines.

Microsoft say the new feature is "like searching through a large online catalogue". When a searcher enters their search term, a link at the top of the first page of results allows users to "visualise" what Bing has found.By clicking on the link displays a gallery of related images which the searcher can then scroll through and select to enter the relevant web content.

At the moment only a small number of search results will return a visual display and the feature is currently only available on the US version of Bing, but these categories and coverage are likely to be expanded as the tool moves out of beta.

Labels: bing, microsoft

As widely reported by many press sources (including the BBC), Microsoft and Yahoo! have finally struck a deal to combine forces against Google. This much anticipated and expected move has been dragging on for over a year and the final agreement just involves the search side of Yahoo!, rather than a full takeover of the business, but it still results in a significant change in the search market.

The 10-year deal will mean that Microsoft's new Bing search engine will now power the results on Yahoo!, although Yahoo! will retain control of how the search results are displayed. Microsoft will gain access to Yahoo!'s search technology and the PPC advertising platform will move to Microsoft's AdCenter system, but Yahoo! will retain responsibility for selling the search advertising across both networks. Display advertising will remain under the control of each company.

Yahoo! will receive 88% of search ad revenues generated by Yahoo! sites and, together, the 2 companies hope that by combining their technologies they can make a greater dent into the search dominance of Google.

So what does all this mean? Probably very little in the short term as the deal needs to be approved by the authorities and also there will be a major logistical challenge to transfer Yahoo!'s PPC advertiser accounts across to the Microsoft service. However, in the long term this should benefit advertisers who have found the Yahoo! PPC service slow and hard to use, whilst Microsoft's service has been praised, yet limited by market coverage.

In the long term the combination of these 2 search services will mean a further focusing of search through a few routes. The impact on the search market will be mostly felt in the US where the combined strength of these companies will impact nearly 30% of the market, yet in many other countries, Google's complete dominance of search activity will not be greatly affected.

The further reduction in search competition is a shame, but it should be a benefit for PPC advertisers to use the better AdCenter system for non-Google search services. It's also a tragedy for Yahoo!, one of the pioneers of web search and directory services, that it has now lost its once powerful position in this market and will need to rely on its other consumer portal services. Over the years Yahoo! acquired some of the original leading players in web search, such as Inktomi and AltaVista, but some of this technology - if it was developed over recent years - may now help to evolve the quality of the Bing search engine.

For Microsoft, this move is what it has been waiting for and gives it the best opportunity to take on Google for greater market share of search. Whether they can use the share that they will get from Yahoo! in the USA to their advantage and to innovate and grow their user base remains to be seen.

Of the many news articles and comments that have followed this announcement, Danny Sullivan has written A Search Eulogy for Yahoo! and Search Engine Watch has highlighted the advantages for search advertisers.

Labels: microsoft, search business, yahoo

As reported by the Sydney Morning Herald, Microsoft's new Bing search engine is targeting regional users through the home page image that changes daily on the site. These images - often of stunning natural scenery - are being adapted for different countries, with the Australian version of the site including images of events such as the Bledisloe Cup and the Darwin Beer Can Regatta.

These, and other images, may be displayed to coincide with national events, in the similar way that Google sometimes revises its logo design for a landmark date. In addition, a number of 'hotspots' on the images appear as a mouseover function, which then takes the user into the search engine results for some content related to the image.

Although Bing's daily changing search page image is an attractive reason to visit the site, the ongoing use of the service will be more dependant on the quality of the search results, and although Bing is adding some new innovations to the service, it will remain an uphill struggle to draw users away from Google on a regular basis, when 'googling' has become an accepted part of website usage.

Labels: bing, microsoft

Bloomberg reports that the search share of Microsoft's new search engine, Bing, rose to 11.1% in the first week of June. According to ComScore figures, this increase in the first week in operation was up from the 9.1% share in the US during the previous week. This is probably to be expected with the luanch publicity and advertising campaign as people try it out - no doubt promising news for Microsoft execs, but the real figures will need to be seen over a longer period of time to show that search habits can be changed.

Labels: bing, microsoft

After some weeks of speculation about the launch date - and name - for Microsoft's new search engine, the new tool, called Bing, has now appeared as the replacement for Live Search. This is undoubtedly a big event for Microsoft and touted as their last chance to really make an impact on Google's search dominance. It's supported by a US$100m advertising campaign that positions the search engine as a 'results' tool and hopes to get Google users to try it out and be impressed.

We will be looking in more detail at Bing in our next newsletter (July 09), but some early reviews from Search Engine Land provide a good background on this new search engine and how it compares to Google's results.

Labels: bing, microsoft

Closely following the publication of Google's and Yahoo!'s financial results for the last quarter comes Microsoft. Widely reported in the press, including by The Wall Street Journal, the software giant posted a 32% drop in profit and the first decline in quarterly revenue in its 23-year history as a public company, due to the global recession having an impact on nearly every segment of their business.

Microsoft has blamed the 16% drop in sales for their Windows software on the reduction in the PC market within the consumer and business sectors, although there may also be an element of customers now waiting for the new improved version of Vista to appear before the year end.

More notably for Microsoft's Internet-focused business was the more than doubling of operating losses from the online services division, to US$575 million. Microsoft is still desperate to improve its competitive position in Internet search and advertising against Google, but has made little progress by the most important measures. The company has continued to hire within its Internet group, even as it has made staff cutbacks elsewhere in the company, and clearly hopes to see a turnaround in this sector soon, but continues to suffer from a low, and declining, share of the search market.

Labels: microsoft, search business

As widely reported in the press, Yahoo! and Microsoft have started talks again over a possible search engine partnership, less than a year after Microsoft failed in a $US44 billion takeover attempt of Yahoo! At this stage there is no suggestion that a takeover bid is on the cards again, but the two companies are believed to be discussing ways they can link up their resources to combat the ever increasing market share of Google.

More information and possible outcomes from these talks will no doubt follow and there remains plenty of life left in this story.

Labels: microsoft, search business, yahoo

There have been reports and rumours circulating for some time now about a new search engine that's being developed by Microsoft. Now Advertising Age reports that Microsoft have briefed their agency, JWT, to develop a new brand building campaign for the relaunched search engine, which may be called Kumo or retain the Live Search name.

The report suggests that the advertising push could be valued at US$80-$100 million to begin in June across online, TV, print and radio. Whether this spend will make much of a dent in Google's market dominance and halt the declining usage of Microsoft's search tool remains to be seen and even if the campaign does get people onto the new search engine to try it out, the experience will need to be something special to break the search habits of many web users.

Labels: microsoft, search engines

The New York Times reports on a move by the 3 main search engines - Google, Yahoo and Microsoft - to clean up the amount of 'clutter' on the web by creating a new web standard that will allow website publishers to remove duplicate pages from their sites. This should allow the search engines to remove lots of duplicated or 'dead' pages from their indexes to make them more efficient and potentially more comprehensive.

This cooperation between the search engines follows the previous standards developed for the sitemap protocol and this time targets those large dynamic websites (such as e-commerce stores) that generate multiple URLs that all point to the same page. This effect can confuse the search engine 'spiders' that are trawling the web and lead to the indexing of the same pages multiple times. Some estimates claim that as much as 20% of URLs on the web may be duplicates, although this is possibly on the high side.

Google has lead the way with this move, providing website owners the chance to indicate when a URL is a duplicate, and if so, which is the principal, or “canonical,” URL that search engines should be indexing. Yahoo and Microsoft have agreed to support the same standard. This new Canonical Link Tag, as the standard is known, should make it easier for both publishers and search engines to address the problem, but of course the most important thing is to make web publishers aware of this and to give them the incentive to add the tag to their pages.

Labels: google, microsoft, webmaster tools, yahoo

A recent survey published by Microsoft's adCenter service in the US claims that small businesses who have built an online presence are failing to invest in search marketing. Apparently 73% of small business owners would rather do their tax returns than start a search marketing plan!

Of course, Microsoft is trying to promote their adCenter PPC service and therefore the survey results are not entirely surprising with an underlying movtive! The study of 400 small businesses in the US revealed that 59% of those with websites don’t currently use paid search marketing, and of those, 90% have never even attempted it.

The Microsoft press release for this survey says that 'despite the lack of investment in paid search marketing, the weakening economy and increased competition, nearly nine in 10 (86 percent) small-business owners surveyed felt that they could be missing opportunities to grow their business, while three in four believed prospective customers could be searching online for the type of service their business offers'. Of those companies that do use PPC advertising, most are very satisfied, as 72% reported an increase in sales enquiries and 68% consider their paid search marketing efforts successful.

Labels: microsoft, ppc, research

The BBC website is among many to report the serious security flaw discovered in Microsoft's web browser, Internet Explorer v7. This flaw could allow criminals to take control of people's computers and steal passwords - it has come to light with gaming passwords being stolen, but the vulnerability could present other security issues for web users.

Microsoft has moved quickly to issue a security patch to fix the flaw, which has reportedly already affected as many as 10,000 websites. Since Internet Explorer is used by a majority of computer users the flaw could affect many webs users and some security experts have suggested that users changes their browsers to Firefox, Opera, Chrome or Apple's Safari system which are not vulnerable to this current flaw.

However, Microsoft have also provided this patch through their automated download system to user's PCs and they recommend that users do have this option selected to happen automatically in the case of these short-term issues.

Labels: internet browsers, microsoft, security

A recent news story in the New York Times reveals plans by Microsoft to open 3 new research centers in the UK, France and Germany to improve its Internet search technology. Described as a vote of confidence in the European economy, it also indicates Microsoft's ongoing plans to close the gap with arch-rival Google.

The new 'centers of excellence' will be in London, Paris and Munich, employing several hundred people. The intention is that the new R&D work conducted in Europe will help to improve Microsoft's ability to run Internet searches and to attract a larger share of the search market and therefore the advertising revenue that comes with it, after its failed bid to acquire Yahoo meant that the option of buying share is currently closed.

According to comScore, Google accounts for nearly 80% of Internet searches in Europe, compared to their 60% coverage in the United States. In contrast, Microsoft has barely 1% of the European search market and in some countries it even trails local search engines. In addition to working on improvements to Microsoft’s existing search technology the European centres are also said to be focusing on new types of searches, including queries from mobile devices and searches involving pictures and video.

Labels: microsoft, search business

The Microsoft / Yahoo! saga continues with a new approach by Microsoft to buy Yahoo!'s search business. As reported by The New York Times, the new offer marks a formal alliance between Microsoft and Carl Icahn, the billionaire investor who has been trying to oust Yahoo!'s board and creating an increasingly hostile and aggressive approach to achieve his - and Microsoft's - desired outcome.

Yahoo! quickly rejected the new offer and the board, who are defending their own positions, appealed to shareholders to reject the approach as a bad move for Yahoo! This latest move is likely to reach a showdown at the annual shareholder meeting at the start of August. Yahoo’s board apparently indicated to Microsoft on Saturday that it was willing to sell the whole company at $33 a share, which was the price first offered by Microsoft back in May, which Yahoo had rejected.

More details about the latest negotiations are included in the article and this story is bound to generate much more coverage and comment until such point as a definite outcome is achieved.

Labels: microsoft, search business, yahoo

Following their failed attempt to buy Yahoo! over the past few months, Microsoft are looking at new ways to develop their online market share and web technology skills through acquisition. Although top executives were quoted in the Financial Times only last week saying that they would not be pursuing a spate of acquisitions - including rumours of Facebook and AOL now being targets - it hasn't taken them long to set their sights elsewhere.

This week Microsoft have announced their purchase of Powerset, a semantic search engine based in Silicon Valley. The news has been widely reported, including by Venture Beat, and the price being paid is over $100m which could be good value for money if the technology can be developed and used to Microsoft's advantage ahead of similar work by Google.

Semantic search is seen to be the next big development within search, whereby the search engine will attempt to understand the searcher's typical requirement based on the search terms being used and so display more relevant results to suit users' needs. Google is working on this technology but may be some way off launching a workable model, so if Microsoft have assessed this new purchase correctly and can take advantage of the specialist skills that come with the company, they could steal a march on Google in the future.

Labels: microsoft, search business, semantic search

In a new move widely reported in the press (including by the Washington Post), Microsoft has announced a new incentive to try to encourage more users to conduct their online shopping through the Live Search engine. Cash incentives are being offered to shoppers through the new 'Live Search Cashback' scheme, so that listed products could offer users discounts of up to 10% of the sale price.

This is a bold - or desperate - move by Microsoft, depending on how it works. The clear intention is to provide a monetary incentive to get users to change their search habits, since the quality of the search results offered by Live Search don't seem to be making any headway against the dominance of Google. It may certainly lead to more traffic from online shoppers looking for a bargain, but it may not significantly change their online search habits.

Microsoft says that its new cashback program covers more than 10 million products from over 700 merchants. These participating merchants will pay Microsoft a fee each time a customer completes a sale through Live Search Cashback and this fee will be a percentage of the retail price. When the purchase is completed, Microsoft will then return the fee to the consumer in the form of a cash rebate, so in reality Microsoft is simply acting as a middleman through their search tool, in the form of an affiliate programme.

The Washington Post article reports that this new scheme is part of Microsoft's plan to "innovate and disrupt" in the search industry, and certainly it is thought that if elements of the cashback plan are adopted more widely by other search services, then it is likely to change the Internet advertising business in fundamental ways, including adapting the ways that search engines provide an 'independent' service, to one where conversions and profits could drive search results.

Labels: affiliates, live search, microsoft

Not surprisingly, the Microsoft - Yahoo! story is unlikely to go away for some time and there are still possible discussions and initiatives to be developed by either party to get to their ultimate objective. As widely reported, including by The Sydney Morning Herald, Microsoft are apparently talking to Yahoo! again about some form of joint partnership, partly to keep the door open to an eventual takeover but also to block any moves that Google may be trying to fill the space of the abandoned acquisition attempt.

Yahoo! is also having to keep an eye on a potential proxy fight from shareholders, led my billionaire investor Carl Icahn who has criticised the Yahoo! board for their handling of the Microsoft offer. The rumours are that Microsoft are discussion some form of joint advertising arrangement with Yahoo!, based on search advertising or targeted display advertising, to try to ward off a stronger partnership being formed between Yahoo! and Google.

There's almost an inevitability that the 3 main players within the search market will merge in some format eventually -and most likely a Microsoft-Yahoo! deal - which will not be good news for the overall market and advertisers, but probably a natural progression for the runners-up to try to tackle Google's strengthening monopoly.

Labels: microsoft, search business, yahoo

The ongoing saga of Microsoft's attempts to buy Yahoo! came to an abrupt halt on Saturday when a top level meetings between the executives of both companies failed to reach an agreement. Despite Microsoft upping their bid price to nearly US$50bn, Yahoo! still held out their position that the bid was undervaluing the business and so Microsoft finally withdrew their offer.

Shares in Yahoo! fell as news of this development reached the markets, and the question now remains - what will Yahoo! do now? Will they continue to pursue the other business alignments that were being investigated during the takeover offer period, such as with AOL, or try to build on the recent advertising trial with Google?

It's no doubt good news for the web search market that Microsoft hasn't pursued this acquisition to a successful conclusion, but it now leaves Yahoo! in a weaker position from which they need to develop their business and services to help them maintain their position in the market, and to protect themselves from other predatory takeover attempts. Microsoft are also likely to be reviewing the outcome and deciding where to spend their cash now and it may eventually come about that another purchase attempt will be made if Yahoo!'s value takes another hit in the future.

Labels: microsoft, search business, yahoo