Ballmer on Search: The Vision vs. Reality

Microsoft is starting to take note of the search marketing industry, the information and talent that exists within this ecosystem, and how to tap that talent even when it isn’t being paid. Even Microsoft CEO Steve Ballmer is getting into the act with an opening keynote this week at SMX. Later this month, Yusuf Mehdi, SVP of online audience business at Bing, will keynote at SES NY. (I’ll be speaking at SES as well.)

The first striking thing about Ballmer’s interview was how much more up to speed he was on search (including the lingo) than he was when Microsoft was getting into the search game. Search has clearly become a priority at Microsoft and everyone who touches the search marketing business has had to come up to speed.

Ballmer talked a lot about data and signals and specifically just how much further search has to go in order to be more useful. He and the other “Bingers” all discussed their vision of search as being more than just SERPs (define) with blue text links leading you to information that may or may not get you all the way toward your goal of gaining knowledge.

Ballmer wants Bing to be number one but said he’s realistic about timing, and that innovation and constant improvement will be a growth driver. He still wants a “game changer” on the business model of search, which might include both monetization and the user experience. He said it’s hard to predict the way search and search business models will evolve in the future.

Experimentation will continue on the mobile, social, real time, or other newer area within search. Microsoft clearly has the resources to continue to experiment in different directions than Google does.

Unfortunately, paid search advertisers will have to wait until after the Yahoo integration before seeing significant innovation on the search advertising and search publishing side. Nearly everyone I know at Microsoft Advertising on the strategy and product side seems immersed in the Yahoo integration, which is no small task.

With a vision of moving from information to knowledge, the Bing team has made some amazing strides in the algorithmic area in the last year. Much of the work is in converting a query to something that includes imputed intent. They’re expected to demo the technology enhancements to Bing search heavily at SES New York and other conferences, so if that’s exciting to you, make sure you attend.

Both Google and Bing are moving away from simply providing a link in a SERP toward moving the results into the SERP. This has a mixed impact on publishers, many of whom have relied on visits to their sites to monetize the information they provide. But the user experience improvements are tangible and quantifiable, proving that there’s still room for improvement and some of those improvements are being made now.

Ballmer also talked about how structure needs to be added to data in order to let a search engine (or a decision engine) mash up data to answer questions requiring the combination of different data sources. Ballmer used the example of wanting to combine macroeconomic data together to determine ratios that might be useful in analyzing a macroeconomic trend, like debt as a percentage of GDP, or changes in healthcare spending based on differing demographics or groups.

Microsoft clearly still believes that Google is abusing some market power and referenced the Microsoft public policy blog where the concerns of Microsoft and marketers and publishers are voiced.

During Bing demos at the conference, we saw logical groupings of suggested search drill-downs, pre-classified and bucketed based on likely user intent. We were also presented with examples of Bing’s machine learning, which can tune search results in near real time.

Ballmer is clearly fascinated with auction-based media and the fact that different bidders value a click differently (and that extends beyond search to bidders valuing impressions differently). Ballmer wants to make Bing more “action” focused and believes that working with the SEM (define) and Web site operators will help there.

On a related note, it was disappointing to see Microsoft eliminate the platform evangelization team whose mission was to empower players in the advertising and search ecosystem to experiment with Bing and Microsoft technologies early in their life cycles, providing feedback along the way. Hopefully, Microsoft finds a way to take advantage of the information the search industry has to offer and they continue to take advantage of SEMPO, which Microsoft has supported for several years as a major sponsor.

Meet Kevin Lee at SES NEW York, March 22-26, 2010 at the Hilton New York. SES and ClickZ are both part of Incisive Media.

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Screenshot shows a Google search for outdoor grills, the shopping ads shows images with “in store” showing the product is available nearby.