Good morning, SANTA CLARA! Sorry, I’m super hyped. So hyped that I was waiting outside the keynote room at 7:45am because I knew they were opening the doors up at 8am for a 9am keynote. Yeah, I’m THAT girl, but I do it all for you. It’s because I pretty much love you. And because CNBC, Kara Swisher and all those other “real” media outlets are coming and I am just a little competitive.
So here’s what’s going on. Danny Sullivan has been given free reign to ask Steve Ballmer anything he wants. Anything! I’m fairly certain Danny’s been chasing Ballmer for years and this is the first time he’s ever agreed. So he’s gotta have something up his sleeve, right? Let’s find out what it is.
On Where Search Is Going…
How will the Bing-Yahoo deal help folks?
The quality both from a marketing and user experience depends heavily on the relevance of advertising and that depends on the density of bids. The ability to put together Yahoo’s volumes & Microsoft’s value and use that in a way that improves the experience for everyone is absolutely fantastic. For marketers it means more eyeballs in one campaign. For users it means the opportunity to see more relevant ads.
He’s screaming. I have no idea why he’s screaming. How will it improve things?
- They get more signals, they’ll do a better job of tuning a better experience.
- It will help to bring scale.
We haven’t had a big game changer in search. Do you see one that’s gonna come?
He sees the opportunity for a number of game changers. It’s really important to be in the game and have positive momentum. You need a differentiated point of view. It’s not a total game changer but they’ll get there. They’re gonna continue to move, move, move. They’re finding opportunities for game changing. They’re gonna continue to make positive progress. They don’t know how to remake the business model of search yet. They think there’s a lot of room for innovation on the business side, in addition to the user side.
Can you be number one in market share in the US?
He says there’s no good answer to this question. If you say “yes” you sound arrogant, if you say “no” you have no faith. He says YES! Some day! You heard it here first, Steve Ballmer is arrogant. ;)
Most people don’t do things with a goal of being second, but a fair degree of realism is required about the current state of affairs. He knows that Microsoft has a lot of work to do. It’s a really competitive market and the level is ramped up. That’s gonna be great for advertisers, publishers and searchers.
You don’t aim for number two, but would you be happy there?
Of course not. They’re very focused on their long term goals. They have great long term optimism. [That may be the saddest statement I've ever heard. That's what you say about your kid who just failed remedial math for the 5th time.] Tomorrow’s goal is to keep working it.
On your way up to being number one, will Yahoo survive as a search player? You’re gonna have to climb over them.
He says they’re not going to kill them. Kill? Who said anything about KILLING, Steve? The goal is to expand the total amount of searches going on on the Microsoft platform. Yahoo has a lot of flexibility under the contract they signed about how they go about that. Growing search share is job 1 and Microsoft needs them to be successful with them.
On That Google AntiTrust Thing…
What’s the deal with the anti-trust issues?
He’s being very open about their interests. They’re commenting on what’s lawful and what’s not lawful. In their case, a lot of times initial complaints will come from a competitor. They have a post on their public policy blog. They’re not being silent.
In the blog post, it says that you didn’t think Google was doing things that were legal – what are those things?
Legal is determine by legislators. We can comment on things that make it harder for us to compete. What can a marketer do? How much info does a marketer get back about their campaigns? What is legal is not set by Microsoft. He mentions the book deal and if Google is violating publisher’s rights.
How about over in China, it looks like Google’s gonna pull out. What does that mean to Bing? Will you grow?
He doesn’t know what’s gonna happen in China. The real force in China isn’t Google or Bing, it’s Baidu. The truth of the matter is, anyone who wants to be a real competitor has to know what it’s like to partner or compete effectively with Baidu. He doesn’t think anything has changed.
On Distribution Deals…
Over the past two years, you’ve had a ton of distribution deal. FireFox still doesn’t list Bing has a default option?
They’re always in selling. At the end of the day, they’d like distribution. They think they’re having all the right dialogues. They’re working hard to improve the quality of the product and the distribution of the product.
Another distribution deal is that you’re powering search on the iPhone – true?
He read that rumor, too! It’s wild stuff. They want to make sure they do a very good job with Bing on the iPhone. He thinks the Bing app for the iPhone is really great. They’re proud of that. Other than that, he’s read rumors.
The stats were that the Bing app on the iPhone was one of the top 5 apps out there. did that surprise you?
No. They knew they did a good piece of work. They knew they’d get a lot of curiosity. People like things that are free. It didn’t shock him. It was very nice. He enjoyed it very much. Hee.
When the Windows phone 7 comes out, will people have the option to switch out of Bing?
It’s more complicated than that. At least in places where the phones are subsidized the operator is critical in this situation. Whatever happens is something that will happen in conjunction with the operator. His guess is that they’re not going to get a huge amount of operator support for people who don’t want Bing. It’s part of the definition of the phone.
Will we get a Bing app for Android?
It’s more complicated than that. Android is not Android is not Android. They have to see how the market develops, which implementations are popular. They have Bing for the iphone and the Blackberry. It’s tricky to see where the market opportunity will lie for them.
How do you see mobile overall in the search space? Is this the year?
We are at a year for mobile. The stats for mobile are going up, up and up. He thinks they’ll see a huge rise in mobile queries, but that PC queries will stay the same. A lot of people won’t even look at mobile like it’s different. It will feel fairly similar between the two environments.
Do you search when you’re out on the move?
Too much. His wife thinks he searches too much while driving. Hee! He only has a phone when he’s in the car because if he’s not in the car he’s in a meeting. On the weekends he can’t be contacted and he looks at that as a “feature”. Ha. Don’t we all.
Is there something culturally different between Google and Microsoft?
The number one thing Google benefits from in search is that they did it right first. They started later. The other guy had that competitive advantage. There’s a value to incumbency. They’ve got everybody moving faster than anything was ever moving before Bing. Microsoft thinks they’re doing something right.
How big a chunk of Microsoft will search make up?
They have ambitions to grow. What’s gonna happen overall in the economics of search engines in the future? In the tech industry, you have big businesses and then people try to remake them. In 5-10 years maybe we have a bigger share but search engines are somewhat less profitable. It’s hard to predict but search will become a part of Microsoft products. First they have to break even. Then they can grow.
What have you found is different about search vs the software products?
The dynamics of an advertiser-supported and auction-big advertiser supported business are really fantastically interesting. There’s something simple and pure about “i sell you something and you pay me for it”. The dynamic of business models are fascinating.
What percentage of your time is taken up by search?
They’ve got 7 or 8 big businesses plus a lot of customers. What’s the frontier of how search and office should interact? When it comes down to actually driving the search team, they have great people doing that. He gets a lot of feedback. There’s always a new frontier or sets of queries that they can do better on. He’s fallen in love with real-time search and Bing Twitter search.
On Social & The Future…
You mention Twitter – will you buy them?
Not clear. They have a great partnership with Twitter. He would hate to NOT have that partnership but he doesn’t think he needs own the company. As an independent they have a lot of value and credibility with the user community. Would they have that same value if they were captive? Not clear. Also, they want to be an independent company.
Are you going to get out on Twitter? You should be yelling at us on Twitter.
Not yelling – SELLING! He says he won’t get on Twitter. He’s much more likely to blog than to tweet. He’s more of a consumer than an author when it comes to the real-time environment. He was tweeting HS basketball scores recently. He has a stealth account. So… I guess he WILL get on Twitter, after all?
What about Facebook? You have a chunk, will you buy it?
That’s another great partnership. They want to continue to be an independent company. It’s good for them and good for us.
What’s the last piece of good constructive criticism you received?
The last piece of constructive criticism came from his wife. She was looking for a recipe for key lime pie and he told her to go search on Bing. She did and there was NOTHING there. He was embarrassed. You can bet they now have the best result for [key lime pie]. [Eh, it's actually not that good. ]
What do you want to see Bing do better?
They’ve done lots of great stuff in the user experience? They have to consolidate some of the stuff that they’ve done. They’re on to the right thing when they talk about making decisions and taking action. There’s a whole lot more they can do in the user experience to continue to drive that. They’re on the right wavelength. There’s still room to improve relevance on tail queries. They’re doing great on freshness. Then they need to take the show on the road – UK, Canada, etc.
What are you happiest about with Bing?
What’s the biggest opportunity in search?
The biggest opportunity is helping people get done what they’re trying to get done. It’s a marketing campaign, but it’s really true. If we understand more about user intent and the data, then we can marry them better. He wants information assembled for him, he doesn’t want blue links. Everyone has to go further and further down that page.
Did the Cashback program work? Will you be investing more, less or the same?
It’s been interesting. He says it’s “worked”, it hasn’t worked fantastically. [Which... basically means it didn't work, right? Of course.] He says they’ll continue it, rethink it, morph it and try some new things. He wants to make it a more potent, important thing for both the merchant and the user.
Where does Microsoft see the money to be made in mobile going forward?
How does Apple make money on phones? With a licensing fee on their own phones. If you offer a phone of high value there is money to be made. They happen to split that with a phone manufacturer. Will there also be search revenue and profitability on the phone? Yes. They will seek to build multiple revenue streams on the phone. He doesn’t think it’s all that complicated but there are multiple revenue streams available.
And that’s it from the keynote! The Real-Time Search session is coming up next so stay tuned!