The Daily Cow

Every query that Bing successfully answers is one that Google is not getting; it would be too costly to submit the same query on Bing, Yahoo and Google, because ultimately the results are nearly identical in quality. Hence, the Internet Search market is essentially zero-sum.

In a zero-sum game, in order to win, your opponent must lose. How can Bing gain the upper hand? By leveraging the incredible reach of its parent company: The Windows OS is used by almost 95% of the world. (More if you count pirated copies in China) So how can Windows help Bing take down Google?

By answering one of the most requested features: Ad block. Ad block was one of the reasons I did not immediately switch to Chrome when it came out, even though Firefox was as slow as a snail. Only after Ad block for Chrome was released did I make the switch. If Windows integrates an ad block service (Similar to what Symantec personal firewalls do) that actually strips out ad-related HTML code (the iframes, for instance) as it passes through the firewall, Microsoft can give Google a major kick in its enormous Achilles' heel: its near-complete dependence on advertising revenue.

Google gets 3% of its revenue from non-advertising sources (Licensing, etc). If Microsoft can basically eliminate 97% of Google's revenue from 95% of the world, Google would lose 92% of its total revenue of $22b, for a total delta of $20.2b. It would be unsurprising if the costs remained around the same in the short run (until they cut, cut, cut!), turning their $4.2b income into $16b loss.

Oh wow! Imagine that. As powerful as Google seems, it can't sustain $16b annual losses. At that point, it will either give up to Bing (sell itself), split into a search and non-search company, or fight till the end. Recall the mathematics of Adblock Plus--If you thought that the amount of restraint Firefox has with regards to protecting Google's interests is significant, just imagine that at a magnitude larger scale, but without the same restraint.

Of course, none of this will likely happen due to antitrust reasons. Although Google can advertise Chrome on its home page, Safari can exclude Bing, and Firefox can choose not to list Bing even in its "Get more search engines" link, somehow Microsoft will always be punished for "bundling"--another name for leveraging an existing division to give a newer division a competitive advantage.

But, given Microsoft's new security initiative (It's developing its own free anti-virus suite), I can always hope that they'll have universal ad-block! Nobody ever brought up ad block as an antitrust concern. The FTC never complained about the ubiquity of popup-blockers; certainly blocking display ads is not much different.

Yesterday, I heard Steven Sinofsky give an inspirational presentation about how far Microsoft has come with its Windows franchise--particularly Windows 7--and how they managed to scale to a division that earns more than half of its operating income. He shared with us the amount of work the entire Windows team put into the product to make it a success (You can find some of the engineering principles and demonstrations on his blog) and his vision for the future.

According to him, the future (the next few years anyway) is not basically a Web-Browser-OS. No, browser games will not replace desktop games. Internet photo-editing applications will not replace Photoshop. And as far as I know, there are no Internet IDEs (although that would be a creative idea). Until Internet connectivity becomes so speedy, inexpensive and ubiquitous, desktop functionality will still remain primary.

I can see the power of cloud computing--mainly if Google did something like Amazon's elastic computing infrastructure or Microsoft's Azure platform, and I know that Google plans to move in that direction. But until that happens--in which case we won't need to continually upgrade our hardware just to keep up with the pace of software--client-side functionality is going to remain the main selling point.

Good job Google at trying to reinvent the operating system. Perhaps you are onto something, but as Sinofsky assured us, if Microsoft sees potential on the cloud, it will take advantage of it. But then again, the entire press is writing in response to a single blog post containing no details.

For Gmail, ironically. Here's why it sucks:

When I open Gmail on Chrome, I get this:

So I have to do a manual reload a couple times. (60% chance the above page shows on first load) When I decide to quit Gmail by closing the tab, I get this:

So I have to use Gmail on IE8. It works pretty well, actually.

Of course, I can't divulge the non-public details but I will try my best to explain, from the enlightened user's perspective, why I believe Bing is qualitatively different from the familiar names like Google and Yahoo and why it's worth a try or more.

Bing is marketed as a "decision engine" rather than a search engine--but what does that mean? It means that Bing should be a destination for users who are looking to make a decision--which flight to take, where to buy the camera, whether to work out in the morning or in the evening, and which hybrid vehicle to try out--and in order to make a smart decision, the users need reliable information--whether flights from SF or Oakland are cheaper, critical reviews of the camera, calorie metrics for different workout regimes, and comparisons of the Prius and the Insight. Essentially, Bing tries to do more than bring you a list of ten websites it believes will be the most informative. It brings the information to you, directly.

Let's take a look at few examples:

1. Which flight to take: Search Oakland to Seattle
2. Find reviews, prices and shopping links for the Nikon D40: Search Nikon D40
3. Research specs for the Toyota Prius: Search Prius
4. Track your packages or find customer service numbers: Search UPS or Fedex
5. Solve simple equations: Search x^2+1=3

Search itself is a commodity. Research has shown that web surfers can't distinguish between the three major search engines in blind experiments (where people were given no hints of the engine via the formatting, style, or anything of that sort). Even shortcut-features like "define caprice", "5*4*log(3)", "TSL" and "China's Unemployment Rate" come standard with the top search engines.

So Bing tries very hard to bring the information to you in a neat, organized fashion (If you click around, you get the information in a clean, tabulated format). That's the main distinguishing feature of Bing: The goal of eliminating the need to click on multiple links to find the information you're looking for, hence their advertisements on "search overload."

Microsoft understands that it's behind in the search market; it started late and did not have a strong brand associated with just search. It knows that the only way to claim its place in the search market is to not lose sight of the overall goal of providing information by focusing entirely on search. Therefore, it sought to distinguish itself from other commodity search engines like Google and Yahoo by bringing more than just links to you. I invite you to take a look at Bing and explore its features, and if you like them, share them with your friends and coworkers. On the other hand, if you see something missing, let me know (comment below) and I will try to accommodate!

Understandably, the impact on the search market will not be substantial. People are used to Google; to over 2/3rds of the world, search MEANS Google. Overcoming that sort of resistance will be very difficult, if not impossible. People are creatures of habit; therefore it will be quite a task to unseat the incumbent as long as it does not become complacent with its market share like IE did after defeating Netscape.

Although I don't expect Bing to overtake Google just because of the recent change, I do expect it to gain some momentum and some followers. Over time, people will come to appreciate Bing, if not for the fresh new approach to decision-making and information-gathering, then for the introduction of serious competition to the search space.

At the very least, we can expect search to be an extremely competitive landscape dominated by three services that won't give up. Ultimately, that is good for every one of us. I hope you give Bing a try and report back on your experience!

Half a year ago I warned of the potentially grave consequences of the EU pursuing its aggressive "anti-monopoly" policy against profitable American firms, particularly Microsoft.

Unfortunately, last week Microsoft voluntarily made the first step in that direction by offering to only sell Windows 7 without Internet Explorer in Europe--ostensibly to give consumers "choice." Unsurprisingly, the European Union rejects this offer and insists on fining Microsoft for being a bad competitor.

Punishing a company from leveraging its competitive advantage is like punishing Baskin Robbins for selling BR ice cream! Microsoft's offer to sacrifice its own natural position and begin at ground zero is extremely courageous. Why is Google allowed to advertise Chrome on its home page? Why should Microsoft IE be a distinct entity from Windows when Safari is obviously an integral part of Macs? Doesn't Apple have a broader control of the entire hardware-software stack than Windows? After all, Microsoft doesn't build the laptop chassis.

Obviously there's a non-business reason behind the EU's aggressive pursuit of Microsoft. It needs the money. It is effectively forcing each working American to "donate" 100 bucks to Europe.

Europe must stop its abuse of foreign companies. It's forcing companies like Microsoft into dangerous directions where there will no longer be software suites or packages, just single-function programs that are completely non-uniform and disintegrated.

What do you say to that?