Microsoft’s struggle to compete with Google in search market dominance
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The ongoing antitrust trial against Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google has brought to light the struggle of Microsoft Corporation’s (NASDAQ:MSFT) Bing search engine to compete with Google’s dominance in the market. The CEO of Microsoft, Satya Nadella, testified on Monday, shedding light on the company’s efforts and challenges.
Despite investing $100 billion into Bing, Nadella acknowledged its position as a «very, very low share player» in the search market. He explained that Microsoft continues to persist with Bing because they view it as a software category they can contribute to, even though it has been challenging to make significant breakthroughs.
Adding to the complexity of the competition is the role of artificial intelligence (AI). Google began incorporating its AI software, Bard, into its search engine in March. Nadella stated that Google could extend its lead by using the substantial profits from its search business to secure exclusive rights to content that could enhance its search AI, thereby outperforming rivals.
The U.S. Department of Justice accuses Alphabet’s (NASDAQ:GOOGL) search division of unlawfully maintaining a monopoly by paying $10 billion annually to ensure that its search engine remains the default option. Google denies these allegations. The government is using Microsoft’s struggle with Bing as evidence that even with substantial resources, it is difficult to challenge Google’s dominance.
Nadella also revealed that Microsoft was unable to secure a deal to make Bing the default search engine on Apple Inc.’s (NASDAQ:NASDAQ:AAPL) products, despite reportedly offering better terms than Google. Furthermore, Microsoft’s own phone is required to use Google search due to licensing agreements with the Android mobile operating system.
The CEO of Microsoft also testified about the significant influence Apple’s selection of its default search engine holds. He stated that Microsoft was open to obscuring Bing’s brand on Apple devices to unseat Google from its default search engine status. Despite making progress between 2013 and 2017, when Apple opted to replace Google as the search engine for Siri and the Spotlight feature, Apple ultimately reverted to Google for the default search engine in its Safari web browser.
