Even AI Hasn’t Helped Microsoft’s Bing Chip Away at Google’s Search Dominance
The new Bing with AI chatbot is ‘cute, but not a game changer’
By Tom Dotan
Wall Street Journal
Aug. 17, 2023 8:00 am ET
When Microsoft unveiled an AI-powered version of Bing in February, the company said it could add $2 billion of revenue if the revamped search engine could pry away even a single point of market share from Google.
Six months later, it looks as if even 1 percentage point could be a tough target, with some new data showing Bing’s place in search has barely budged—partly because of how Microsoft handled its high-profile rollout.
In July, Bing had 3% market share worldwide, according to analytics firm StatCounter. That is the same share it had in January, the month before the launch of the new Bing. Another report, from analytics firm Similarweb, shows Bing had around 1% of Google’s monthly visitors in July, around the same it had in January.
Microsoft is calling the new Bing a success. It disputed outside data, saying third-party data companies aren’t measuring all the people who are going directly to Bing’s chat page.
With generative AI chat, Bing can now give people direct, conversational answers to queries instead of long lists of links. It has put the often overlooked engine at the forefront of the hot new technology. Still, the habits of those using internet search engines are firmly entrenched, overwhelmingly with Alphabet’s Google, which has fended off prior attempts to dent its dominance.
A chat interface is still an unusual way for people to try to find information online, said Daniel Tunkelang, a search consultant who has worked with Google and LinkedIn, now owned by Microsoft.
The new Bing is “cute, but not a game changer,” he said.
The addition of AI helped boost Bing’s user base by 10% to 98 million in the months from its February launch through June, according to measurements from analytics firm YipitData. Even with the growth, Bing’s user tally is still tiny compared with Google’s 1.12 billion.
Microsoft Chief Executive Satya Nadella said his goal with the release of Bing with AI was to make Google ‘dance.’ PHOTO: CHONA KASINGER/BLOOMBERG NEWS
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Yusuf Mehdi, Microsoft’s chief marketing officer for consumer products, said in an interview that the company’s internal data show Bing gaining market share against Google. The company has seen increases in its mobile searches and Edge browser, he said.
“We’ve made more progress in the last six months than we have in the previous decade or two combined,” Mehdi said. “We’re delighted with our start.”
Microsoft declined to share its data. YipitData, Similarweb and StatCounter said their data does take traffic to and from Bing’s chat into account.
Google followed Microsoft with its own generative AI features, setting up an AI-powered search war and one of the first big public tests of the much-hyped technology.
Search has never been a major part of Microsoft’s business. It is hoping a revamped Bing could change that. Revenue growth so far suggests the new Bing hasn’t changed the trajectory of its advertising sales. Microsoft’s ad business, which accounts for less than 6% of revenue and is largely from Bing, was up 3% in the most recent quarter compared with last year—the same as the previous quarter and slower than the pace it had before it launched Bing.
The Bing rollout was an unusually flashy affair for the decades-old company. In a presentation from Microsoft’s Redmond, Wash., campus that was reminiscent of an Apple iPhone release, Chief Executive Satya Nadella and others showed off how Bing chat could compare prices for TVs, plan meals and write up vacation itineraries.
In an interview during the event, Nadella said his goal with the release of Bing with AI was to make Google “dance.”
Microsoft employees, some of whom had hoped Bing would be the first demonstration of the new technology, were chagrined when ChatGPT launched in November. PHOTO: STEPHEN BRASHEAR/ASSOCIATED PRESS
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ndeed, Google responded, releasing its own generative AI chatbot called Bard in March. In May it began testing a new tool that integrates generative AI directly into its regular search page.
Last month, Google CEO Sundar Pichai said the company is committed to making AI chat an integral part of its search engine.
“Over time, this will just be how search works,” he said.
One of the barriers to Microsoft gaining more market share despite being the first to add AI chat to its search engine, analysts said, was that it was initially only available for people who log in with a Microsoft ID on Microsoft’s Edge browser, which less than 10% of people use, according to StatCounter.
Microsoft says it is soon making Bing’s full AI chat features available on the more popular Google Chrome and Apple’s Safari browsers.
Delaying a release to other browsers was a bungle, said Jeff Coyle, a co-founder at MarketMuse, a startup that makes AI business software.
Microsoft “missed a huge boat,” given all the hype around the Bing launch, Coyle said.
Microsoft’s Mehdi said the company chose to restrict Bing chat to Edge as its infrastructure wasn’t capable of handling a wider release. He said the release on Edge also helped accelerate the browser’s growth.
Nadella, who once led the Bing team at Microsoft, made the decision for the search engine to be one of the first examples of the company’s partnership with OpenAI, in which it had invested billions.
Ultimately, what might have stolen Bing’s early thunder most was the excitement around OpenAI’s ChatGPT, which came out earlier and used the same chat technology as the new Bing.
ChatGPT launched in November— much to the chagrin of some Microsoft employees who had hoped Bing would be the first demonstration of the tech. By January, ChatGPT had already surpassed Bing in terms of monthly users and continued to attract more users even after the new Bing was launched early this year. In June ChatGPT attracted 233 million users while Bing’s user base remained below 100 million, according to YipitData.
Write to Tom Dotan at tom.dotan@wsj.com
Microsoft has much more at stake as it adds generative AI to more of its products and services. It has added the tech to its popular workplace software including Word, Outlook and Excel. It plans to charge $30 a month to users of the new Microsoft 365 suite of software.
Even AI Hasn’t Helped Microsoft’s Bing Chip Away at Google’s Search Dominance - WSJ |
