Last month, I was among the 100 million daily active users who went to Bing to run a search query despite being a long-time Google user. I couldn’t resist trying out Bing’s new capabilities powered by GPT!
Turns out, Bing AI has gotten a lot of people questioning whether “search is dead.” Perhaps for the first time, Google Search is playing catch up, having released Bard shortly after Bing AI.
In this guide, we’ll examine the impact of new AI capabilities on the search market, compare and contrast the product strategies of Google and Bing, and extract valuable lessons from their (significantly, but decreasingly so) one-sided battle for search supremacy.
According to Microsoft, Bing’s new AI-powered capabilities made a measurable impact on its business beyond just generating news and tech gossip.
In terms of sheer volume, Microsoft reached 100 million daily active users for the first time. In terms of bringing in net new users, one-third of daily active users were new to Bing. In terms of adoption of the new chat-based capabilities, users used chat-based capabilities on average three times a session.
If I were the product manager on AI-powered Bing, I’d be pretty pleased with myself!
The evolution of Bing over the years is a really interesting product management case study. You’d expect Bing to be a huge winner in the search space given Microsoft’s dominance in the enterprise software space and their access to a large amount of resources. But Bing only accounts for less than 10 percent of worldwide search volume.
So why does Microsoft keep investing in Bing despite the small market share overall? And how are they thinking through how to take on a larger share of that market?
Microsoft released Bing in 2009 as a direct competitor to Google, but they were in the search market for quite some time before. Remember MSN Search?
Bing itself is quite different from Google; it uses a different search algorithm, has a different methodology behind crawling websites, and surfaces results differently. But, ultimately, it’s trying to achieve the same goal as Google Search: helping users find the answers they want.
When Google came around in 1998, it truly redefined search with a simple interface that produced noticeably better results. Google rapidly grew to take over the search market. Microsoft spent a bunch of time rethinking its approach to search, which culminated in Bing.
Because Microsoft is such a dominant presence in the enterprise software space, Microsoft bundles Bing into many aspects of their product offerings, most notably Edge and Ads. Microsoft also offers some Bing Search functionality via an API.
I’m not a Microsoft insider, but as a former venture capitalist focused on enterprise tech and now as co-founder and head of product at a B2B SaaS company, here are five observations from watching Bing take on Google in the battle for search engine traffic as an outsider looking in:
Based on Bing’s history, there are a few interesting contextual tidbits that are relevant to any strategy conclusions we attempt to take away:
From this, we can learn some interesting lessons from the excellent product gurus at Microsoft about how to win when you’re coming from behind to take away market share. Let’s dive in!
A huge factor in Microsoft’s success is its ability to bundle many products together to sell that package to a single customer. This isn’t just a product win, it’s also a GTM win, where customers of one product can serve as lead generation for another product.
For example, Microsoft has made a lot of progress against Slack by bundling Teams with Office. In fact, Microsoft now reports 10 times more daily active users than Slack does. Companies who use Microsoft Office are great lead sources for Microsoft Azure, and Bing is embedded throughout Microsoft products.
So, if bundling can provide such an effective moat, why are people still using Google? Shouldn’t they be using Microsoft Edge, with Bing as their default search provider?
In my opinion, Bing’s initial strategy of trying to compete head-to-head with Google was hampered by a simple blocker: its search algorithm wasn’t producing results that users wanted, and Google’s search algorithm was simply noticeably better. People would try Bing and immediately revert to Google — I remember being one of these people in 2009.
Even with a bundled product, if a vendor provides a service that is measurably better for an important use case, they will choose to go with that best in class option. In the case of search, being able to find the information you need is obviously incredibly important, and people felt that Google was producing better search results.
Let’s dig in a bit deeper on why Bing’s initial strategy of going up head-to-head against Google was (and is) an uphill battle. When Google first came out, its search algorithm was obviously better. But Bing has since improved its algorithm significantly. From my perspective as an avid user of internet search, it’s much harder today to pinpoint which is “better.”
This takes me to how user experience can’t always beat user habits unless, again, it’s measurably better. Bing has a more beautiful interface and focuses on prioritizing content that matches user intent. And yet somehow it’s still a distant second in the search market.
The problem is that it’s hard to change user behavior; once users are used to the Google interface and understand how to get the most out of their search results, a slight improvement isn’t enough to get them to change their habits.
It might sound like all is lost for Bing, but Bing did have a unique insight: that users who are searching for information want to get an answer that matches their intent. They might not want to read through 10 articles in order to find an answer, and they want to see results that map to their intent.
Back in 2009, this was a difficult problem to solve. LLMs didn’t exist, so the state of the art was a list of results.
Fast-forward to 2023 and things have changed dramatically. Foundation models like LLMs are changing what it means to search for information and deliver an answer. Rather than presenting a list of results, you can use LLMs to synthesize the results into a simple, digestible answer.
It is this leap in technological ability that represents a shift in Bing’s strategy. Rather than positioning against Google in a Google-versus-Bing battle as they did in 2009, they are flipping the script. Instead of being another search provider, they are seeking to reimagine what it even means to search for an answer to a question.
Doing so allows Bing to take control of the conversation and change how it is judged by consumers. Rather than going to Bing and comparing the list of results that surface, users are interacting with Bing AI to see if they can get their questions answered faster. They are going to Google to see if Google has AI capabilities and comparing it to Bing.
By repositioning as something new, Bing gives itself room to define what the feature set should be for an AI-powered search provider rather than being judged by a rubric created by a competitor.
Bing has completely reimagined what search should look like, but it was a long time coming and it wasn’t done alone. The partnership with OpenAI goes deeper than simply leveraging GPT APIs.
Back in 2019, Microsoft inked an exclusive deal with OpenAI, and Microsoft plans to invest multi-billions to extend its partnership with OpenAI, which includes building supercomputing capabilities on Azure Cloud. By working with a best-in-class partner, Microsoft was able to bring a new, differentiated product to market faster.
What’s particularly interesting about Microsoft Bing’s strategy is that it continued to invest in Bing despite years of being a smaller player in the market. That’s likely because, in Microsoft’s mind, it’s not about Google vs. Bing, but rather how Bing fits into the overall Microsoft strategy and portfolio of products.
Of course, Microsoft would probably love to dominate the search industry by capturing a majority of search volume but, like we discussed earlier when we talked about the topic of resourcing, this likely wasn’t Microsoft’s end goal.
Instead, Microsoft is building a strategy for Bing that isn’t a tit-for-tat, feature comparison battle. Bing is integrated throughout the Microsoft suite of products and has an API that builds developer mindshare. Bing, alongside LinkedIn (acquired by Microsoft in 2016) combined, provide interesting and differentiated Ad offerings. The new AI-powered features are carving out new space that doesn’t belong to anyone quite yet.
Whereas it might have looked like Bing was released as a Google competitor over a decade ago, that statement certainly doesn’t apply as obviously today.
I can only guess what Bing will look like in a couple of years, but I can imagine that it won’t look like traditional search as we know it today.
As Bing seeks to differentiate and redefine search, I would imagine more natural language answers. I would expect the Bing chatbot to sneak its way into the entire Microsoft Office Suite. And perhaps they will expose an API to the Bing chatbot itself!
One thing’s for sure, Microsoft has evolved its strategy for Bing so that it’s not simply a search alternative. Through bundling, distribution, and a different product philosophy, Microsoft is bringing new life to Bing.
That said, Google is fast behind with Bard — although I’m sure Microsoft feels great about being first out the door!
The evolution of Bing’s product strategy teaches us valuable lessons in product management. By focusing on user experience, changing the conversation when necessary, building strong partnerships, and understanding that it’s not always about being the market leader, Microsoft has managed to carve out a unique space for Bing in the search engine market.
As we watch how Bing continues to evolve over the next few years, we can learn even more about how product managers can adapt their strategies in competitive markets and continue to innovate despite facing formidable rivals. Ultimately, it’s about finding your niche and leveraging your strengths while staying true to your company’s overall vision and goals.
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