News Analysis: Searching for Success
Despite its marketing millions, Microsoft won't have an easy entry to the search engine sector. Ben Carter reports.
Bill Gates may have made billions out of PCs and the phenomenal growth of the internet, but he is facing one of his biggest challenges yet - persuading web users that his internet business MSN has the best search engine on the net.
When it launched last week, MSN Search was late to the market. Although there are already several successful search engines, Gates has ambitious plans to establish it as the number-one search engine by toppling dotcom high flyer Google from its throne.
Changing consumer habits will be no easy task. Google has established itself as the world's leading search brand, with more than 16m people in the UK using it every month. Last week it exceeded the most optimistic financial forecasts by reporting fourth-quarter profits of dollars 204m (pounds 108.4m), making it the world's highest-value internet stock.
Microsoft is preparing to unleash its marketing firepower to support a high-visibility strategy intended to ensure MSN Search is on the lips of all internet users. In the UK, as revealed in Marketing last week, Microsoft is planning its first TV ads for four years to promote the engine and is also running an equally high-profile online ad campaign funded by its biggest ever spend.
Julian Smith, online advertising analyst at Jupiter Research, says a high-profile marketing approach is crucial for MSN Search: 'It will have to splash out on marketing. Because, beyond the internet industry, there's little knowledge of MSN Search, so it will be the only effective way of poaching Google users.'
Matt Whittingham, head of information services at MSN UK, agrees: 'The marketing campaign is key. We're not going to rely on word of mouth, which is why we've agreed on such a high spend.'
Relying on word of mouth is exactly how Google built its business, and initial indications from the notoriously publicity-shy company are that it plans to carry on shunning high-profile brand advertising despite the new challenger's hefty marketing plans.
Google UK will not comment specifically on Microsoft's launch. However, it has pointed out that Google has more than 8bn indexed pages, dismissing MSN's claims that its own search engine will more accurate and relevant because of its 5bn pages.
As well as relying on a high-visibility campaign, MSN will also use its network, which is accessed by more than 15m internet users every month, to drive traffic to the search engine. Whittingham claims this will help differentiate MSN from Google because internet users will already be accessing MSN-branded services such as Hotmail or Instant Messenger; searching with MSN will be a natural step.
MSN is not new to search, and although not in any way as high profile, it has had an engine for several years, provided by Overture. However, the launch of MSN Search, which took 18 months of planning, marks the first time it has developed its own technology. This is not only significant because it can now deliver its own indexed search results, but also because it will be able to take a chunk of the increasingly lucrative search engine marketing revenue. …