Rumor: Microsoft Betting Big Bucks on Bing

There are more signs that the unveiling of Microsoft’s revamped Live Search — codenamed “Kumo” during its development phase — is at hand. It’s been widely speculated that Steve Ballmer will introduce it this week at the Wall Street Journal’s D: All Things Digital conference.

Rumors about the launch have been filtering into the public domain. The latest? The official name for Kumo is “Bing” — and Microsoft is going to spend anywhere from US$80 million to $100 million promoting it.

Microsoft did not return the E-Commerce Times’ call requesting comment in time for publication.

What It Takes

Bing’s rumored ad budget would be a sizable spend for any advertising campaign — especially in this market, Peter Cohan of Peter Cohan & Associates, told the E-Commerce Times.

“Microsoft, though, has a huge obstacle in front of it trying to displace Google,” he said. “The best way to do that would be to offer search technology that provided advertisers and consumers with more compelling results than what Google currently provides.” The advertising, of course, would alert consumers that Microsoft had such a product to offer.

First and Only Impressions

It’s a risky strategy. If Microsoft should invest in an aggressive ad campaign but deliver a glitchy product — as Redmond has been known to do in the past — then that chance to make a good first impression will be lost forever.

Search technology is different from browsers, which require a bit of a commitment. Users have to download their browser choices, after all. A search engine is much easier to discard after one bad test drive.

“There is no point in spending all that money on advertising unless the product is far superior than Google,” Cohan added. “Why bother to switch if it is just the same — or even worse?”

Other than one-off sneak peaks here and there, little is known about Bing nee Kumo. The most expansive public view was provided by a set of screenshots and a memo penned by search executive Satya Nadella, leaked earlier this year.

Nadella’s internal memo asks for feedback from Microsoft employees on the project. Ads relating to the search are displayed on the right, images appear on top, and the search results dominate the page. The search terms are organized differently from Google search results — into subject matters or categories related to the search term. For instance, one of the samples shows results of a search for country singer Taylor Swift; they include concert ticket ads, along with images of the singer — and search results grouped into such categories as Taylor Swift Songs, Taylor Swift Biography, Taylor Swift Albums and so on.

Another clue to Bing’s final look? Many believe the new product has been developed using Microsoft’s acquisition last year of Powerset.

Longstanding Campaign

Not everyone believes Microsoft is facing a one-strike-and-you’re-out scenario, least of all Microsoft.

“My understanding is that Microsoft is taking a long-term view to this,” Greg Sterling, principal of Sterling Market Intelligence, told the E-Commerce Times.

The advertising campaign is supposedly the beginning of a new initiative, and what is introduced will not be the finished product, he said.

How effective the advertising campaign will be is questionable, though, Sterling said. The search industry has not had many successes in promoting products this way. Ask Jeeves, for instance, got a lot of attention in the early 2000s with its television campaign, but that did not translate into a measurable market share.

By contrast, Google built up its initial market share through word of mouth, noted Sterling.

Microsoft’s campaign will follow on the heels of Google’s recent TV buy for its open source browser, Chrome. The ads compare Chrome’s speed and other attributes against established browsers — primarily Internet Explorer, but also Safari.

It is an interesting parallel development: Google and Microsoft attempting to make inroads in each other’s dominant market.

Still, advertisers hoping to see this as the start of a trend are likely to be disappointed, Sterling said. “No one except the largest firms have money to spend on advertising right now.”