Web Search War is Far From Over
By Fletcher, Mike
Analysis The collapse of takeover talks between Yahoo! and Microsoft boss Steve Ballmer last month saw Yahoo!’s share price plummet by 15 per cent and the Financial Times crown Google chief executive Eric Schmidt victorious in the battle for online search and advertising.
After walking away from the wreckage that was once a negotiating table, Microsoft has since been busy gearing itself up to fight another day by re-establishing its commitment to search.
The company has overhauled Live Search and adCenter in a bid to persuade advertisers that it remains a viable search option. In the short term, Microsoft aims to increase its market share beyond four per cent, thus overtaking Yahoo! In the longer term, it has ambitious plans to close the gap on Google, which according to Hitwise occupies around 87 per cent of the UK search share.
Improvements to Live Search include an increased image index with images organised on one page, a new integrated mapping product following the $50m (Pounds 24.4m) acquisition of Multimap last year, a new location-based mobile search, and the expansion of celebrity- plus book-related searches.
“Search has to keep moving forward and become easier with each reinvention,” says Chris Dobson, Microsoft acting general manager, Consumer and Online International UK. “In this release, we’ve collaborated with the British Library, plus added video content that plays when you scroll over each clip. Coming soon will be ‘internet scroll’, enabling continuous page scrolling as opposed to clicking back and forth.”
In addition, improved tools and functionality on Microsoft adCenter are designed to simplify campaign planning and editing for advertisers. Microsoft has confessed that agencies are demanding greater traffic. It has responded with improvements including enhanced negative keyword functionality, clearer reporting abilities and upgraded campaign editing facilities.
Simon Norris, director of payper-click (PPC) agency Periscopix, says: “We endorse the view that MSN just hasn’t provided the volumes in the past. It’s been its biggest failing. There’s no lock-in to use Google in the same way as Microsoft Office products, so MSN needs to keep on giving compelling reasons to move away from Google. How is it that a company with Microsoft’s resources hasn’t been able to come up with the next big thing in search?”
Endsleigh Insurance Services places weighty importance on exposure across all the major search engines. eMarketing executive Michael Day concedes, however, that the volumes that come from Yahoo! and Microsoft during PPC campaigns are tiny compared with Google. “To my mind, it would have been good for Yahoo! and MSN to pool their resources and merge,” says Day. “I like Yahoo!, especially Yahoo! Answers, but MSN’s search capabilities just don’t feel massively relevant.”
Microsoft’s Dobson insists that advertisers are “egging us on” in the quest to improve MSN search. Google’s auction pricing policy has seen the cost of PPC campaigns spiral against volumes of clickthrough, which are starting to level off in certain sectors. Advertisers are looking to Yahoo! and MSN for cheaper, but effective alternatives.
Up until May, Scott Field was search account director at Yahoo! This month he joins Universal McCann to lead its search operation in the UK.
“Driving down the PPC rate may spoil Google’s dominance, but the question for search engines is how?” he asks. “Yahoo! is taking steps to differentiate, and the search results page will change dramatically in the coming year. But it’s also a perception problem. If everyone who owns a Yahoo! mail account also used Yahoo! search, there would be no need for a merger.
“By joining an agency, I can focus on the ROI delivered by the complete digital marketing package. I believe this is what advertisers will demand when search reaches critical mass.”
Periscopix’s Norris cites the car insurance sector being charged Pounds 3 a click to advertise with Google. He says: “Some PPC rates have doubled in the past year, and soon the return on investment will be just too marginal to bother. Rival search engines can drive the price back down through innovation and increased traffic, but where does Google go from here?”
By next year, half of the world’s online advertising, set to reach Pounds 28bn, is expected to flow through Google’s engine. Google has made no UK search announcements in the first quarter of 2008. In summer last year, it launched Universal search, which blends listings from news, video, local and book search engines into horizontal results.
According to a company spokesman, this year has so far focused on improving word passing in Thai and optimising translate.google.com, launched at the end of 2007.
He says: “Everything we do is designed to break down barriers to knowledge. It’s all a long way from perfect, but we’re excited about the potential.”
With Google forging onwards, Dobson knows that Microsoft has a long uphill journey ahead of it. The doorway to a combined market share via the proposed merger with Yahoo! now seems closed, although a return to the negotiating table shouldn’t be ruled out.
If it’s not to be, however, Microsoft has a $47.5bn war chest to focus on the likes of Facebook or AOL.
If Yahoo! heads the way of AltaVista, it will regret its missed opportunity. MSN, however, concludes Dobson, is definitely in it for the long haul:
“Microsoft has a history of playing the long game, and it’s all about scale. I know we’ve yet to join all the dots and we intend to take search off in many different directions. This is still an early dawn in the search world and the fight is by no means over.”
“How is it that Microsoft hasn’t been able to come up with the next big thing in search?”
Simon Norris
Periscopix
Microsoft MSN has made improvements to Live Search including enhanced video
Copyright Haymarket Business Publications Ltd. Jun 2008
(c) 2008 Revolution. Provided by ProQuest Information and Learning. All rights Reserved.