With Market Share Shrinking, Microsoft Bing’s China Dream is in Serious Danger

With Market Share Shrinking, Bing’s China Dream is in Serious Danger

Mar 26, 2013 at 09:00 AM by C. Custer, in BusinessWeb

Microsoft’s Bing search engine has never been a major player in China. The company itself conceded that last fall when it all but abandoned Chinese language search, opting instead to focus on what it then said was the 5 percent of searches in China that use English rather than Chinese. But six months later, it appears Bing’s strategy hasn’t worked. In an interview with Sina Tech, Microsoft VP Shen Xiangyang said that the company’s shrinking China market share — now barely above half of one percent, according to research firm CNZZ — put it in a seriously tough spot:

If you can’t see users’ search questions and choices, if you don’t have enough data to work with, then there is no way to make improvements [to the search engine].

And in this market, a search engine that isn’t improving is going to get left behind. Bing already appears to be most of the way there, but the further behind it falls, the less data it has to work with, making a comeback increasingly less likely.

Even so, Shen suggests the company will continue with its focus on English-language search:

Differentiating yourself in web search is extremely difficult. Today, if Chinese users want to search in English, Baidu doesn’t work, and a certain overseas company’s search [Google] doesn’t necessarily work well either. If we can get half of the China market for English search, Bing will have three percent of the overall China search market.

Another possible approach to the market might be pushing Bing to Chinese users through a browser — especially since many Chinese users still surf with Microsoft’s Internet Explorer. But Shen doesn’t seem particularly optimistic about that happening anytime soon:

If Bing could use a browser the way Qihoo 360 or Sogou do, our market share would definitely go up. But Microsoft makes changes very cautiously, and it needs to further understand users’ usage habits [before making any changes to Internet Explorer].

Does Bing really have any chance in China? It hasn’t yet managed to capture even the tiny English-language search market, and more and more Chinese users are moving away from Internet Explorer and onto domestically-designed browsers, so any browser advantage Microsoft hoped to capitalize on would need to be exploited fast. Personally, I don’t see it happening. But China’s search market is pretty crazy. You never know what could happen.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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