Bing may not be competing with Google.

Bing may not be competing with Google.

Bing Chat: Separating the Hype from the Reality

Bing Search Engine

In early 2023, the tech world was abuzz with excitement about Microsoft’s Bing search engine and its new AI chatbot, which promised to be a game changer. Pundits hailed it as the start of a new era – a “Bing-aissance” of sorts. One headline even boldly proclaimed, “Bing is king!”

But all the hype came crashing down when the Wall Street Journal published an article calling the new Bing with AI chatbot “cute, but not a game-changer.” The article cited market share statistics to support its claim – Bing’s global search engine share was only 2.99% in July, a marginal increase from the previous months.

However, relying solely on market share statistics to assess the impact of Bing Chat is an oversimplification of the situation. Market intelligence firm StatCounter, often regarded as a reliable source for big trends, clarified that their data only measures search engine referrals and not the actual number of queries performed in Bing Chat. Their numbers indicate the impact of Bing referrals on websites that utilize their tracking service, but not the overall search engine market share.

A closer look at the data reveals another limitation – Bing Chat only works on the Microsoft Edge browser or with the Bing app on mobile devices. This puts it at odds with the most popular browser, Google Chrome, and default browser on Apple devices, Safari. Hence, the numbers presented by StatCounter reflect only a subset of users who have access to Bing Chat.

To gain a clearer understanding, we can exclude mobile and tablet platforms and focus solely on desktop search statistics in North America. When analyzed in this context, referrals from Bing increased by 2.2%, while those from Google decreased by 2.8%. Yet, even these numbers should be approached with caution.

SimilarWeb, another analytics firm mentioned by the Wall Street Journal, provides estimates on search engine market share. They report that Bing had a 3.23% share on all platforms worldwide in June 2023. This percentage jumps to 8.79% when considering only desktop platforms worldwide. Moreover, when examining solely the traffic from desktop machines in the United States, Bing’s share spikes to 12.55%. Unfortunately, SimilarWeb’s presentation lacks labeled data points, making it difficult to determine any movement in the market share.

These varying numbers and the lack of transparency in data collection methods from each analytics firm cast doubts on the accuracy of the conclusions drawn by the Wall Street Journal. Furthermore, the article fails to capture the bigger picture.

In a leaked 2022 strategy document, Microsoft CEO Satya Nadella highlighted Microsoft’s strategy in the advertising business, stating that they capture about 2% of the $560 billion core market. Nadella acknowledges that although their products rate highly in terms of user experience, their market share does not reflect this due to various structural obstacles. The document emphasizes the need to increase browser share within their large install base to drive a step change in their advertising business.

This suggests that Microsoft’s goal with Bing and Edge is not to directly compete with Google as the world’s dominating search engine. Instead, they aim to expand their advertising business, which already generates revenue of at least $10 billion annually. By leveraging their install base of Windows PCs, Microsoft can incrementally increase their advertising revenue, even though this approach may irritate some users.

Thus, Microsoft’s strategy appears to revolve around grinding the funnel, nudging Windows users towards adopting Edge as their preferred browser. While this might seem annoying, it presents a substantial opportunity for additional advertising revenue.

In conclusion, the debate surrounding Bing Chat and its impact on the search engine market demands a more nuanced perspective than what the market share statistics provide. Microsoft’s ambitions lie beyond surpassing Google as the dominant search engine. Their focus on scaling up an already profitable advertising business demonstrates a greater emphasis on incremental revenue growth. So, next time you hear about Bing Chat, remember that the story goes far beyond its market share – it’s all about the strategic moves Microsoft is making in the tech industry landscape.