Seeking Alpha
Profile| Send Message| ()  

As expected Microsoft (MSFT) CEO Steve Ballmer today unveiled Bing, the company’s new search engine.

Ballmer made the announcement in Carlsbad, California at D: All Things Digital, the Wall Street Journal tech conference. Ballmer was interviewed on stage by the WSJ’s Wall Mossberg.

I’m blogging it live.

  • 8:11 a.m. On the economy: People generally agree that this is a different recession than other recession, caused by deleveraging of the economy. Hit 330% of GDP, much higher than before the Depression. Bunch of money has to essentially come out of the economy. Was funding cards, flat panel displays, PCs. IT is 50% of capital spend in U.S. businesses. I like to remind people: Recession implies you go down, you go up. This is money that has to come out of the economy. We are really resetting as the economy. Think of today as normal, rather than yesterday as normal. (I would note that Ballmer has been making this very point repeatedly in recent public appearances.) In 1873, bubble burst in Vienna, got worldwide deleveraging, took 50 years for Chicago real-estate prices to recover.
  • 8:14 a.m. Ballmer says they are in this stuff for the long term. But holders are not sure whether today is normal, or yesterday was normal. We flattened out our cost base, really means shaking up future product investment scheme. Still over $9 billion a year in R&D. Retrace slightly long-term versus short-term.
  • 8:15 a.m. You can do a lot new for that, but do less new. And tail projects that get cut. But major ramp ups in areas like mobile and search.
  • 8:16 a.m. Walt is asking Ballmer about a poll the WSJ took before the conference. A slide on share of search, asking the public what they prefer. They are third at 8% in single digits in this measure, after Google (GOOG) and Yahoo (YHOO). What are biggest issues for you? Get great people do work on like seven big things. Really getting great people, and then figuring out where you should or should not interlock strategies. Spending more time on that then being the search guy and the mobile guy. We have great talent, we hire well, we’re not afraid to change, upgrade talent.
  • 8:20 a.m. Seven big things? Ballmer says we obviously where we are in search, we want to do better. Mobile area is red hot, and its all nascent, nobody sells very much. Apple (AAPL), BlackBerry (RIMM), us. Contrast units to PC. In five years, this will be market that has tripled or quadrupled. PC business remains big. There is vibrance in all of our children.
  • 8:22 a.m. Another slide from the poll. How consumers choose a search engine. “I like results”, “out of habit,” “I trust the brand” are the top 3.
  • 8:24 a.m. Next, we get a video from Microsoft. Ballmer says there were times in their history they felt like history. It takes persistence. Don’t always get things right. Video gives people flavor for how they get things right in search.
  • 8:25 a.m. The video has a goofy Star Wars theme. And here comes the debut of the new name: Bing.
  • 8:27 a.m. Video over. Ballmer is having fun saying “Bing.”
  • 8:27 a.m. Why Bing? Ballmer says why any name? Most important thing is we have a brand that means portal, working on extensions for Windows and Office for the cloud. But we wanted something that unambiguously said search. If you don’t have a name, something people can talk about, if always just embedded component of a portal…this is just about search. I want people to think there is an alternative, it has a clear name. I am not the creative side of life. Short matters. Short URL. Has been proven that being able to verb-up is useful. Works globally, no negative connotation. To grow share, we don’t have to capture imagination of everybody, but have to start build brand equity.
  • 8:31 a.m. Walt wants to be sure it was not named after Bing Crosby. Ballmer says it is short, easy to say. Had to secure the trademark, the URLs. More likely Dave Bing than Bing Crosby.
  • 8:32 a.m. Now the demo, with the help of Microsoft online exec Yusef Mehdi. Live version goes up on June 3.
  • 8:33 a.m. Demo. Start with basic search. Search: Cannes Film Festival. There is best match feature at the top of the page. The official, authoritative site. Second thing includes specific data, in this case who won awards at Cannes.
  • 8:35 a.m. Ballmer says most frequent clicked on thing on search page is back button: 25%.
  • 8:36 a.m. Customer service numbers for companies show up right at the top of the page.
  • 8:37 a.m. If you want fresh data: type in flight number, you get fresh data on gates, departure time.
  • 8:37 a.m. Can hover over links, get previews on any searches. Mining knowledge from Wikipedia also.
  • 8:38 a.m. Next, helping with research and tasks. Search for Taylor Swift. Explorer Pane on left side, with quick tabs put together by humans and computers. Lyrics, images with infinite scroll. Can go to fan club, buy tickets. Ballmer says question is how much can we do by human, and how much by computer. Computationally will understand that Taylor Swift is an artist. They did a test with jill Sobule, and same stuff came up. For video search, you can hover in the search screen and watch video.
  • 8:41 a.m. Search for San Diego. Get map, list of attractions, weather including 10-day forecast. Hotel listings. Events.
  • 8:42 a.m. Search for Lakers, get all sorts of information.
  • 8:43 a.m. Search for goods: say Canon camera. Get quick tabs with related searches. Also can shop for that product. Mossberg said it looks like an Amazon page. But it is algorithmic search, not paid. (Although there are paid ads on the right.) Can click through to user reviews from multiple sites around the Web. Algorithmically collecting user comments. All commerce sites. Expert Reviews. Also can compare prices. And cash back feature, which is not new, although more weaved into the site. Save about 6% on the camera.
  • 8:45 a.m. Flights from San Diego to SF. Use Farecast, which they own, get list of flights, now will be part of Bing Travel. Can sort by price, time, etc. Also can see estimates on whether fares will rise or fall. All of this, remember, is still in the search engine.
  • 8:47 a.m. Bing! MSFT up 20 cents, or 1%, to $20.33.
  • 8:47 a.m. Ballmer says now is the time to license content to be in here, can do deal for proprietary content they want to sell. In terms of real revenue on the Internet, there is Google for ad revenue, us and Yahoo, and everything else. Advertising as business model on the Internet is less proven than people think. Value could be redivided somehow with content providers and search engines and advertisers.
  • 8:49 a.m. Bing! Demo is over.
  • 8:50 a.m. Back to the interview. Walt wonders if this is like Ask.com, which redesigned, gained share, and then it melted away, and went back to where it was. Why won’t that happen again? Ballmer says things are not going to change over night. This is going to take lots of years. But he says they are not going to share his goals on stage. Fundamentals, size of the index, way you manage it, we’ve made huge progress. But GOOG is the market leader. IF differentiators appeal to 20% of the people, that’s pretty healthy.
  • 8:52 a.m. Walt wonders about marketing. Ballmer says they will have what they think is a big budget - big enough that he had a gulp - a gulp at a $60 billion company is a big gulp, he says. There will be new PCs pre-configured with Bing and other online properties. Have to keep working away at it and working away at it. Search has not been very dynamic category in terms of innovation. We’ll try some things, I think some people will like our unique point of view.
  • 8:56 a.m. Ballmer says right now, most wireless data goes over PCs, not phones, and likely will for 5-6 years. Smartphone maybe 120 million units of 1.1 billion phones right now, could hit 400-500 million units. PCs will be maybe 400 million then. Both will use cloud, wireless. Phone apps substitute for the PC. Will people stop designing Web for the PC and instead for the phone? What is base screen size?
  • 8:58 a.m. Windows mobile platform, he says, is super important to us. He wants to sell a significant number of those 500 million smartphones. Can bridge the gap between small screen and big screen. both important devices. We make a lot of money in one, and not as much in another.
  • 8:59 a.m. On netbooks: 52% of people said they do not plan to buy one. Ballmer says netbook is a funny brand. There is complete cacophony on what is a netbook versus a notebook. If you asked if people will buy portable computers, the numbers will be higher. Mossberg says it is important for retailers, and travellers, but not an all new computing device, a smaller device. Ballmer thinks it is more revolutionary: leverages Internet, and the PC, and gets those things at a lower price point. Can embed it next to a TV. Part of STB, say. Not giving up Internet, PC, plug ins. Leveraging existing things in a whole different way.
  • 9:02 a.m. Windows 7 is on track for the holiday season, he says. He notes that Vista was faster adoption cycle than XP, and Windows 7 will likely be faster still in the enterprise.
  • 9:03 Q&A time. Q: What happens if you search Paris Hilton? A: Ballmer says frontier of natural language will be most explored in the search query
  • 9:07 a.m. Q: What about health? MSFT is investing in electronic medical records; business intelligence to pull single view of records in various systems; and then how do you publish it out to the consumer. Investments along the chain. Tough business. The health care providers do not make IT decisions quickly. An important area for us.
  • 9:09 a.m. Q: What about sponsored links? More supply constrained than demand restrained right now. Cash back thing is certainly differentiated, he says. Paid side is tougher. GOOG has proprietary database of bids on their sponsored side. Part of relevance is relevance of the ads on the page.
  • 9:11 a.m. Q: Rob Glaser, CEO of RealNetworks (RNWK), wants to know the plan for pivot to Windows 7 on Netbooks. Ballmer says vendors will have option to ship XP, there will also be starter version of Win 7, or more functional home or business version.
  • 9:13 a.m. What about Yahoo? Ballmer says there is a lot that could make sense in a search partnership; whether such a thing will happen, I don’t know.

And finally…Bing! MSFT is up 25 cents, or 1.2%, to $20.38.

Original post

Source: Live Blogging Microsoft's Bing Announcement