by Shane O'Neill

Microsoft Doesn’t Quit: Redmond Goes for Broke with Bing and Zune

May 28, 20094 mins
Data Center

Microsoft invests heavily in two markets where it is outmatched: search and multimedia players. Will it pay off?

Microsoft made it clear this week that search and Zune are two areas of focus and investment for the foreseeable future.

On search, Microsoft has rebranded its search engine with the name “Bing” (as in Bada Bing) and plans to spend $100 million on a massive ad campaign against Google, according to an Advertising Age story. Also, Microsoft announced that the Zune HD portable multimedia device will come out this fall and compete directly with the iPod Touch.

Ok, cue the laugh track. This is pretty funny, right?

Microsoft has been stuck below 10 percent market share in search since what seems like the Nixon Administration while Google has become a household verb. And Zune? I’ve been speaking about the Zune in the past tense for awhile now. It was a solid, but poorly marketed multimedia player that never caught on in an iPod world. Wait, what’s that you say? The Zune’s back?

Zune HD
Microsoft’s Zune HD multimedia player.

These attempts to take on Google and Apple and climb out of the market share basement do seem futile. Microsoft can’t win in search or MP3 players.

Well, not so fast. The goal isn’t to win, but rather to chip away. CEO Steve Ballmer called Bing an “important first step forward in our long-term effort to deliver innovations in search.” Microsoft will reportedly unveil search features lacking in Google such as “related categories” that make search deeper and more specific and also allow you to refine your search instead of starting over. The Advertising Age story cites Microsoft research showing that 42 percent of searches require refinement, and 25 percent of clicks are the back button. Bing aims to fix this.

No doubt $100 million in online, print, TV and radio advertising will help raise Bing awareness, but Bing will have to provide a life-changing search engine to even chip away at the almighty Google. And I find it unlikely that Microsoft will create search features that Google and Yahoo do not have already or at least have in the works.

Ballmer did a demo of Bing and an interview today at the D: All Things Digital conference in California. Here’s a press release about Bing, which is being referred to as a — don’t laugh — “decision engine.”

Click here for PCWorld’s visual tour of Bing.

As for the Zune HD, screenshots (see above) I’ve seen look a lot like the iPod Touch, but that’s not to take away from its sleek and sexy form factor. It has a touch-screen display, Wi-Fi connectivity, Xbox integration and can play high definition movies (with an HDMI-out port on the side), high definition radio and allows Web surfing via a mobile version of Internet Explorer.

I don’t think Apple is shaking in their boots. The only feature that sets Zune HD apart is the HD Radio. But is that enough, with all the free Internet radio applications available such as Pandora and Slacker Radio? Yes, the sound quality will be almost perfect with Zune’s HD Radio, but do enough people care about that?

The Zune HD’s only chance against the iPod Touch is lower price and aggressive marketing. A battle of features they will most certainly lose. No pricing has been announced yet.

Though it seems like a wild risk to invest tens of millions in lost causes such as a would-be iPod killer or a Google-busting search engine, Microsoft is actually doing what it should be doing: Investing in newer markets. Isn’t that what we all said back in January when Microsoft revenue took a historically bad hit and it announced layoffs? It was clear then that Microsoft could not rely on Windows, Office and PC sales anymore; the time has come to invest in search, mobile and Web applications. Well, they’re doing it.

Sure, Microsoft may fail spectacularly in both the Bing and Zune campaigns, but you have to give them this: They’re not afraid to fail and, sorry to sound like a Hollywood movie football coach, they never quit. They like to compete.

Old Redmond is about to give it the old college try in the search and multimedia player markets. They’ve been Goliath enough times; it’s time to be David. Of course this David has deep pockets, which never hurts.

What do you think? Will Microsoft’s aggressive marketing of Bing and Zune HD increase their market share in the next year?

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