Just 1% Of $100 Billion Is Fine

Ever since its release  last year there has been quite a bit of talk about the strategy behind Microsoft’s search engine Bing.  “Does the Redmond giant really think that they can compete with Google?” is what some pundits are asking.

Other pundits have (wisely, in my opinion) noted that Microsoft doesn’t need to dominate search.  It is a $100 Billion (yes, with a B) industry.  Every percentage point is $1 Billion (again, with a B).  If Microsoft moves from their current search dominance of %15 to %20 is an extra $5 Billion to the top line.

Also, with Bing Microsoft has decided to focus on some of the highest paying search terms.  Apparently they don’t want to dominate all search terms, just the premium ones.  Hence their tight integration with specific services, such as travel.

While first to market, disruptive marketing practices, and market dominance are all tenants of successful marketing (technology or otherwise), there is something to be said for playing second fiddle in a huge market – especially if you can maintain lower operating costs.