MSN to Compete in the Search Market Today
Microsoft’s MSN is currently the leader in the search market, and it has recently signed a deal to keep its shopping channel Kelkoo on its platform, a deal that will help it compete with Yahoo! However, this deal will have to be re-examined in the medium to long term.
UK market penetration: near 20%
Microsoft is rebranding its Bing apps as MSN, and is launching a beta of the re-launched service today. The Bing apps were originally formed to aggregate news, but the new portal aims to deliver content and demonstrate Microsoft technologies. Rather than competing with media owners, MSN is going to focus on curating content from its own editorial teams and from partners in more than 50 countries. The new site will also allow users to synchronise articles across platforms and operating systems.
‘Google effect’ on search
While Google and other search engines have gained a lot of popularity, the popularity of MSN search has not diminished its dominance in the market. Microsoft has a history of copying booming products, sometimes better than the original. The company has successfully copied Lotus 1-2-3, WordPerfect, and Netware, and is the dominant operating system on over 90 percent of personal computers. MSN search has this extra edge over the competition, and Microsoft could very well exploit it effectively.
‘MSN effect’ on ad revenue
The ‘MSN effect’ on a web publisher’s ad revenue is not well understood. The question is whether ad revenue from Microsoft products can compete with revenue from rivals Yahoo and Google. The chief operating officer of Yahoo recently said the company was exploring targeting search ads. But the company has not introduced the feature yet.
Microsoft’s push to boost online ad revenue has been accompanied by a series of changes to its business model. For starters, it will be retooling its advertising products to make it easier for brands to advertise. The company plans to feature ads only in places where users can see them. It also promises to not display ads below the fold. This approach is backed by several advertisers. Microsoft has had a long history of repositioning its products and services. The last major change was in 2012 when the company partnered with Reuters and Associated Press to support the launch of the Windows 8 operating system.
Microsoft’s MSN unit reported ad revenue of $357 million in the third quarter of 2007. This increase represents a 7 percent increase compared to the same period in 2005. However, this increase pales in comparison to the more than eight-times-faster growth of Yahoo and Google’s ad revenue.
