Google is better than Microsoft’s search engine, Bing. Everyone accepts this and it’s reflected in usership figures of course, but now it seems not even Microsoft CEO Satya Nadella disputes that fact.
Taking the stand during the landmark US v. Google antitrust trial this week, Nadella spoke about Bing’s competition with the search engine. Adam Severt, a lawyer at the Department of Justice, kicked things off by asking why the Microsoft CEO even wanted to compete with Google in the first place.
“I see search as the largest software category” said Nadella, sporting a dark blue suit during his lengthy testimony in DC on Monday (Oct 2). “I used to think of Windows and Office as attractive businesses until I saw search.” Nadella explained that Bing didn’t have to win the market or even get anywhere close to Google’s ubiquity to be a big business - and that Bing has turned over a “marginal profit” of billions of dollars for Microsoft.
Severt’s questions focused for a long time on Google’s billion-dollar deal to be the exclusive search provider on Apple, and what it would mean to Microsoft if they were to get the deal instead. “It would be a game changer,” Nadella said. “Defaults are the only thing that matter… in terms of changing user behaviour.”
He went on to say that Microsoft was prepared to give Apple all of the economic upside of the deal if Apple switched to Bing — and said he was prepared to lose up to $15 billion a year in the process. “We needed to be less greedy and more competitive”.
Nadella explained that a sudden increase in distribution would give Bing an increase in “query flow”. More people doing more searches leads to more data to work with, more improvements available, and ultimately more reasons for advertisers to come to the platform.
An improved search engine would then get used more, and that virtuous cycle would be the key for BIng to catch up to Google’s quality, says Nadella. But as the losing party, they’re working with the exact opposite right now.
Microsoft has previously tried to become Apple’s default search engine. “How’d it go?” asked Severt. “Not well” said Nadella.
Not only would the Google partnership be much more beneficial financially for Apple, but the Microsoft CEO also said Apple may be afraid of what Google would do if it lost default status. What if Google starts using the full force of it’s hugely popular services like YouTube or Gmail to start promoting Chrome over Safari?
According to Nadella, that fear keeps Apple and Google together as much as anything.
