Look what Microsoft’s doing to catch up Google

Luring customers with cash

It’s an unusual move for a search engine — and one that doesn’t make Microsoft any money. But the company hopes the tactic helps fill one of its biggest needs: increasing sampling of Live Search.

Microsoft’s other attempts, such as games, have been largely unsuccessful. When ComScore introduced its qSearch methodology in July, Microsoft had a 12.4% share of search; by last month that figure had dropped to 9.4%. Nielsen pegs Microsoft’s April search share at 9.7%, up slightly from its 9% share the previous year. And Hitwise has worse news: Microsoft has gone from 7.8% in April 2007 to 6.3% today.

“What Microsoft is saying is: ‘Our stuff is good, but people don’t try it because they don’t think of our brand,'” said Ellen Siminoff, chairman of Efficient Frontier. While Microsoft has spent billions on consumer advertising, most of it pushes the company’s software products. (It’s got to hurt when a firm such as Millward Brown ranks Google the world’s top brand when it has nary a consumer ad push of any significant scale.)

This launch, said Microsoft Chairman Bill Gates, is a way of “simplifying the tasks and rewarding the consumers and advertisers for their engagement in a major way.” Whether consumers really understand that depends on how well Microsoft explains and markets the program. The company launched an online-only push last week.

Live Search needs customers. Search is a scale business, and Microsoft can sell to advertisers only as much inventory as it can generate. It generates inventory by successfully luring users to its search engine. To really be a competitive player, it needs to approach 15% to 20% market share, said Bryan Wiener, CEO of 360i. “Microsoft’s returns have been good,” he said. “The ad platform works. The challenge has been ramping up volume.”

We will have to wait and see if this impacts Google in any significant terms. For me, I still think that the final conversions will show us the efficacy of this disruptive approach as smart search marketers will measure their return on investment down to the conversion level.

What do you Think…?

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~ by digivine on May 28, 2008.

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