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Microhoo's Battle Is for Hearts and Minds

  |  July 30, 2009   |  Comments

Even if the combined forces of Microsoft and Yahoo build a search engine that's 10 times better than Google's, will it matter?

Even if the combined forces of Microsoft and Yahoo build a search engine that's 10 times better than Google's, will it matter?

That is the question. Not if they can, but if they can will anyone care?

User behavior, particularly established user behavior, is a tough nut to crack. And Google, with close to 75 percent of search share, is far and away not only the verb when it comes to search but the undisputed market leader. Even combined with Yahoo, Microsoft will now own only 21 percent of the domestic search market and much less than that overseas. Once market share and behavior have been established on that type of scale, try to change it. Go ahead, try.

The merger, says Microsoft CEO Steve Ballmer, will give consumers more choice. Yet when it comes to search, consumers seem to have already made a firm decision.

If any company is aware of how difficult it is for consumers to make this type of shift, it's Microsoft. The company's very foundations are rooted in consumer loyalty to the Windows operating system. Is it better than Apple's? Than Linux? Or is Windows the most insecure and unreliable OS on the market (a broadly held opinion). Yet that doesn't stop Windows from having close to a 90 percent global market share. Sure, it's eroding a bit. But consumers worldwide just expect to see the Windows logo when they boot, not unlike the way they expect to see search results appear within Google's interface.

Just ask advertisers. You can tout product benefits until the cows come home, but it won't necessarily give you an edge. I think Pepsi tastes better than Coke. So do the overwhelming number of consumers who have taken the Pepsi Challenge over the past 30 years. Yet Pepsi remains solidly at number two in the cola market, and no one sees it going anywhere anytime soon.

Microsoft is aggressive. Microsoft is innovative. Microsoft has zillions of dollars to invest in developers, research, marketing, and advertising. Bing's a mighty good search engine. But in the end, it may not matter all that much unless more consumers use it to search. Plenty of advertisers have praised Bing, its advertiser interface, and the ways they can slice, dice, and segment target audiences on the platform. Despite the kudos, they admit they're still going with Google. That's where the critical mass is.

Sure, the Microsoft/Yahoo deal is probably good for advertisers. A larger user base will make Microhoo that much more interesting to advertisers and probably help lower CPC (define) costs. But unless the new initiative can lure a substantial number of searchers away from Google and over to this new camp, it's not going to be that much more attractive to advertisers, ergo not that much more competitive.

And does this new entity mean advertisers will up their search budgets? I very much doubt it. A classic problem in search advertising is the finite nature of the inventory. You've only got as much inventory as there are searches performed against a given keyword or keyword phrase, regardless of how many (or how few) search engines are competing for those dollars.

Ironically, those who may stand to immediately benefit from this new partnership are traditional publishers. Google, the company that famously doesn't advertise, has recently been touting AdSense on radio spots. Microsoft, meanwhile, has been touting Bing Travel on TV. If the Search Ratings War escalates -- and it may -- both these deep-pocketed companies may vie for advertisers as well as searchers through other channels.

Innovation is wonderful. Improved, faster, more reliable, and more accurate search is useful, exciting, valuable, and interesting. But what Yahoo and Microsoft now face isn't merely a battle for improving and innovating search platforms, it's a battle for hearts and minds (not to mention mindshare).

Even if they're better, will it make any difference? The Windows operating system, Coca-Cola, reality television, George W. Bush's second term in office...Over and over, consumers will go with what they're familiar with, not what's better. Or even what's better for them.

Good luck, Microsoft and Yahoo. You'll need it.

Meet Rebecca at Search Engine Strategies San Jose, August 10-14, 2009, at the McEnery Convention Center.

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Rebecca Lieb

Rebecca was previously VP, U.S. operations of Econsultancy, an independent source of advice and insight on digital marketing and e-commerce. Earlier, she held executive marketing and communications positions at strategic e-services companies, including Siegel & Gale, and has worked in the same capacity for global entertainment and media companies, including Universal Television & Networks Group (formerly USA Networks International) and Bertelsmann's RTL Television. As a journalist, she's written on media for numerous publications, including "The New York Times" and "The Wall Street Journal." Rebecca spent five years as Variety's Berlin-based German/Eastern European bureau chief. Rebecca also taught at New York University's Center for Publishing, where she also served on the Electronic Publishing Advisory Group. Rebecca, author of "The Truth About Search Engine Optimization," was ClickZ's editor-in-chief for over seven years.

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