The latest comScore numbers, showing Live Search holding steady, but not gaining, at 10.3% of the market share, seems to indicate that Live Search isn’t succeeding. Yet as was pointed out a couple of weeks ago, a 10% share of search is a pretty healthy business, probably equating to ten billion dollars in market cap, according to some admittedly unscientific numbers crunched by Don Dodge. Why then do we care so much about market share? Does Microsoft need to do better in order to be considered successful?
The internet is driven by search. With so much information available, a better way of finding and presenting information can be very valuable. As one of our commenters pointed out, Live Search has remained steady in search share for the past few months, reversing a downward trend by MSN Search that brought the whole change on to begin with. And yes, Paul, that is a good sign. Of course it takes time to make significant changes, and it is still very early in the game. Searching for videos, for images, presenting better information around searches, finding stuff faster, it’s all going to get better. We haven’t seen really good search yet, even by Google.
However, there’s no question that Microsoft had wanted and expected to be in a better position at this point. While Live Search can’t be considered a failure, neither can it be considered a success, and Microsoft is well aware of that. For one thing, adCenter, Microsoft’s answer to Google’s Adsense, needs the networking effect of a greater market share to become successful itself. Users who search are looking for something, and are likely looking for something to buy, and advertisers look for the best bang for the buck. More searches, more adsense impressions, a greater chance that the ad will get results means that Adsense just makes more sense than adCenter. Again, it’s still early, and adCenter is improving all the time, but without greater Live Search market share, a killer adCenter tool isn’t going to make that much difference. To woo advertisers, Microsoft must gain search market share.
Another commenter pointed out the seemingly great numbers for live.com. Again, it’s true that Microsoft drives a lot of traffic to its sites. But digging a little deeper into the Alexa numbers (by clicking on “site info” and then “traffic details“):
- mail.live.com – 47%
- login.live.com – 24%
- spaces.live.com – 20%
- search.live.com – 4%
- get.live.com – 1%
- live.com – 1%
- help.live.com – 1%
- other websites- 2%
…we can see that most of the live.com traffic is driven by Mail (Hotmail), Spaces, and Live ID. Live.com itself, and search.live.com, are only 5% of the traffic that Alexa shows going to Live.com. In contrast, 64% of the traffic Alexa shows going to Google goes to the search page, Google.com.
Where search is really starts to matter is with mobile search – as finding directions, business locations, and of course phone numbers makes search not only useful but almost necessary. Microsoft seems to be betting that mobile search on Windows Mobile will help to turn the tide, but all of that may change beginning Friday when the iPhone rearranges the playing field.
Microsoft needs to do better in search. Google just keeps on gaining, and today set a record for its stock price. It’s commendable that Microsoft seems to have stopped the bleeding both in market share and stock price, but this is a game that changes quickly, and it’s not enough to just hold share.