What's Bing All About, Anyway?

Microsoft's (Nasdaq: MSFT  ) latest ad for Bing begins with two friends in a supermarket, presumably stocking up before a football-viewing party. One friend can't decide between guacamole and salsa, and that's where the search cacophony starts.

The other friend interprets his query as a request for salsa music, and that's where the rest of the supermarket begins distorting the original request. By the end of the ad, an Animal House food fight breaks out, complete with the husky friend re-enacting Bluto's zit scene with a mouthful of guac.

Yes, it's another annoying Bing "decision engine" commercial. They'll keep coming, because they've been effective. Bing wasn't even around two years ago, but it's really the only mainstream competition that Google (Nasdaq: GOOG  ) is facing since Microsoft managed to get Yahoo! (Nasdaq: YHOO  ) to outsource its queries through Bing.

What does this all mean, though? Are we clear on what makes a decision engine different than the search engine that Google and Yahoo! have been cranking out for years?

The Bing ad ends with someone simply typing "salsa" into Bing, so I figured I would start there.

Typing "salsa" into Bing doesn't help me decide between guacamole and salsa. There are four snapshots at the top of salsa recipes, but the first two text-based entries are for salsa music. That's followed by clips of salsa dancing videos and a link to bike maker Salsa Cycles.

Isn't this the same noise that Bing ads mock? It's not any better on Google. In fact, it's probably worse. On my search, Google's entry features the same two salsa dancing and music Wikipedia entries followed by a bike company. Google does have "related" links to salsa recipes and homemade salsa in a smaller font above the entries.

Obviously there's no five-letter word that's going to settle the score between two popular chip dips, but Bing's the one advertising that pecking s-a-l-s-a into its search window is going to open up a realm of clarity. It's not. Bing is just another search engine.

We don't need better search engines. We need better searchers.

Some will argue that it doesn't matter. Bing wins because the marketing campaign has helped establish the brand it launched when it repositioned its Live search two springs ago.

Financially, I can't agree. Microsoft continues to post losses in its online business despite Bing's sophomore year success. The trend is unlikely to reverse when Microsoft reports Thursday.

The publicity hasn't been enough to drum up advertisers willing to pay top dollar for keyword bids through Bing. In a grim tip to what we may expect out of Microsoft's online arm later this week, Local.com (Nasdaq: LOCM  ) shares plunged 25% earlier this month after it hosed down its guidance.

As a syndicator of Yahoo! paid search, Local.com blamed Bing's taking over Yahoo!'s results for the lower revenue generated per click. In other words, Bing leads are cheaper for sponsors than they were on Yahoo!.

This may not be problematic when Yahoo! reports earnings tonight. Yahoo!'s terms include pricing guarantees from Bing during at least the first 18 months of the 10-year deal. It will be Microsoft that pays the price for its inability to drum up chunkier ad revenue. 

Mr. Softy isn't going to cry about it. A cash-rich balance sheet and its high-margin software stronghold will draw attention away from Bing's financial setbacks.

However, sooner or later, Microsoft is going to have to explain what makes its "decision engine" superior when -- on the salsa-typing surface -- it's simply following the same dance moves found elsewhere.

What do you think of Bing's search engine? What are you expecting out of Microsoft in this week's quarterly report? Share your thoughts in the comment box below.

Google and Microsoft are Motley Fool Inside Value choices. Google is a Motley Fool Rule Breakers recommendation. Yahoo! is a Motley Fool Global Gains pick. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz admits to being one of Microsoft's vocal critics, though he was impressed with the company's previous quarter. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 25, 2011, at 12:28 PM, pondee619 wrote:

    "that Google (Nasdaq: GOOG) is facing since it managed to get Yahoo! (Nasdaq: YHOO) to outsource its queries through Bing."

    did Google get Yahoo to outsource its queries through Bing?

    Then what does: "the search engine that Google and Yahoo! have been cranking out for years" mean?

  • Report this Comment On January 25, 2011, at 1:06 PM, TMFBreakerRick wrote:

    The full quote:

    "Bing wasn't even around two years ago, but it's really the only mainstream competition that Google (Nasdaq: GOOG) is facing since it managed to get Yahoo! (Nasdaq: YHOO) to outsource its queries through Bing"

    The "it" here is Microsoft/Bing that managed to get Yahoo! to outsource, though I see where my wording could have been a lot clearer.

    Rick

  • Report this Comment On January 25, 2011, at 1:38 PM, Pygmalion1 wrote:

    I tried your test. The top result in Bing are 4 salsa recipies with pictures. Followed by links to salsa dancing and music.

    The top result in Google is "Salsa Cycles - Adventure bikes, frames, and parts". Followed by links to salsa dancing and music.

    Which one is better if you are looking for salsa (the food)? Seriously, "Salsa Cycles"?

  • Report this Comment On January 25, 2011, at 1:50 PM, dileepkrp wrote:

    Rick, there is only so much a search/decision engine can do for you(users). If you type in salsa and get both the dance and food links including pictures. What else are you looking for? A search engine to tell you what type of salsa you like? These are tools helping us make a decision, not a sustitute for our intelligence. Bing is a beautiful product, the organization, the design and the visual appeal and honestly, it is much easier to find the content through Bing than through the Google flat links. Yes, Google changed the landscape and they are the leaders, but that doesn't mean that Bing is less usable. Your comment on profitability may be valid, but to get to that you seem to have made up an issue of salsa results in Bing not being useful for you to decide between glaucamole and salsa. To decide that it needs a brain, and not just a brain, it needs your brain because that is decided by the memories and experiences that is embedded in your memory. So you are pissed since Bing doesn't have a dump of your brain (aka private information) that you refuse to share in the first place. Right!

  • Report this Comment On January 25, 2011, at 2:42 PM, TMFKris wrote:

    I thought some of the theory was that people would turn to social-network sites like Facebook for help from their "friends" when deciding what kind of dip to get. Although I don't know how long you can stand around in the grocery store waiting for your friends to respond.

    Kris -- TMF copyeditor.

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