Bing: Enhancing market positioning across UK search
UK market share touched 4% in 2011:
Bing is the third biggest local search engine operator in the United Kingdom, with strong market penetration across 40 countries worldwide. This wholly owned brand of Microsoft was launched in 2009. In September 2009, Microsoft signed a partnership agreement with Yahoo to provide end-to-end support for its flagship brand "Yahoo! Search" with majority of customers and partners to transit by 2012. The parent corporation's online service divisions (Bing & MSN) witnessed increased net losses over the past 18 months due to higher traffic acquisition expenses slightly offset by improved search advertising portfolio in United Kingdom and core market space, i.e., United States.
UK online advertising market reached £4 billion in 2010:
United Kingdom online advertising market is worth £4 billion, with year-on-year growth of 13% in 2010. Online display advertising market is one of the fastest growing in United Kingdom owing to advertisers' push towards social media platforms accounting for 24% of the total market in 2010. In the UK, Online accounted for 29% of total advertising landscape, one of the largest across Europe (Denmark 28% and Norway 25.3%). Google is the largest online search operator in the United States controlling dominant market share of 85% in 2011. Bing faces steep competitive pressures from niche brands such as Yahoo (2.6% market share) and Ask (market share of 1.6%).
Strategic partnership & search experience value propositions in the UK:
In 2011, Microsoft's flagship search engine brand "Bing" witnessed net revenue increase of US$50 million with operating loss due to extensive distribution and revenue partnership agreement to enhance traffic share. The company has 88% revenue sharing partnership with Yahoo. On the other hand, it integrated Facebook to enhance regional and local penetration in May 2011. In the UK segment, Google has strong habit centric hold, i.e., majority of B2B and B2C consumers standalone preference is search via Google. Bing is enhancing user search experience by focusing on valuable outcomes and not just search results to enhance competitive advantage.
Will Bing surpass Google in UK and international search engine market space?
Microsoft's online search revenue increased in United Kingdom with strong decline in operating and net margins for Bing attributed to aggressive search advertising distribution sharing model in domestic market space. Further, the company has been spending on Bing technology development to surpass Google over the past 11-15 months along with acquiring traffic share to enhance ads spent. It is vital to understand business and regional strategies by which Microsoft plans to enhance Bing market positioning and brand equity in UK (dominated by Google with approximately 85% market share) on long-term basis. It is also necessary to look into unique local value propositions to end consumers as compared to other international markets; what can Microsoft provide to enhance sustainability?