5 ms·

Bing doesn't need to win — they just want Google to be a little less profitable.

by marban 3y ago

echelon 3y ago
Or a lot less profitable. “From now on, the [gross margin] of search is going to drop forever,” Nadella said in an interview with the Financial Times. “There is such margin in search, which for us is incremental. For Google it’s not, they have to defend it all,” he added, referring to the competition against Google as “asymmetric”. https://www.ft.com/content/2d48d982-80b2-49f3-8a83-f5afef98e8eb https://www.ft.com/content/2d48d982-80b2-49f3-8a83-f5afef98e... https://archive.is/4JOW1 https://archive.is/4JOW1 It's 50% of Google's revenue, and they'll suffer immensely if this goes away.
- jjeaff 3y ago
  I'm curious what the 50% figure includes? Because my understanding is that about 60% of Google's total revenue is search ads, and if you include network ads (which would be relevant since they are at risk from AI as well) then it is more like 70%.
  - joelcloud 3y ago
    Adsense revenue from different websites will drop because it will be summarized and cost per query will go up. This AI push will backfire
    - wbl 3y ago
      The buggy wip maker couldn't have stopped Ford
      - somat 3y ago
        A strangely mixed metaphor, and incorrect, the buggy manufacturer did well enough... for a while at least. https://en.wikipedia.org/wiki/Studebaker https://en.wikipedia.org/wiki/Studebaker
        TylerE 3y ago
        Not a mixed metaphor, it’s a standard phrase. Note buggy WHIP makers, not buggy makers.
        somat 3y ago
        It is mixed because it is comparing two different class of items whips to cars does not really compare. Cars to buggies would compare or perhaps whips to steering wheels.
        stonogo 3y ago
        No, it's not mixed. It's related to the saying about the people who get rich off a gold rush being the ones who sell shovels. In the buggy-whip case, it's about a company not understanding the market changing entirely to make them obsolete. The transportation market moved to cars, and so nobody needs a buggy whip.
        AndrewKemendo 3y ago
        Watch the movie “other people’s money” for the original reference
        stonogo 3y ago
        The original reference is probably Levitt's "Marketing Myopia" (https://books.google.com/books?id=Zn4foOUm3AoC https://books.google.com/books?id=Zn4foOUm3AoC). Levitt uses it to illustrate that companies should focus on customers rather than products.
        AndrewKemendo 3y ago
        Well OPM came out in 1991 so I doubt it. https://youtu.be/62kxPyNZF3Q https://youtu.be/62kxPyNZF3Q
        stonogo 3y ago
  - perelin 3y ago
    There is a good visualization of Googles income statement here https://www.reddit.com/r/dataisbeautiful/comments/xjbpfo/oc_advertising_is_the_majority_revenue_and_profit/ https://www.reddit.com/r/dataisbeautiful/comments/xjbpfo/oc_... looks you are about right
- hgsgm 3y ago
  I'm surprised that a court-proven antitrust violator Microsoft would speak so openly about abusing it's dominant position in a different business to finance dumping a different product at low price to destroy a competitor.
  - akdor1154 3y ago
    I was surprised as well for the same reason.. but then I thought about how Google has directly attacked Office, Windows, and Windows Mobile in a pretty similar way.
  - zeusk 3y ago
    Like google was being a saint to Microsoft with Chrome and their web properties on Windows Phone.
jimsimmons 3y ago
At least on HN can we stop parroting this supposed open book strategy from 5D chess Nadella? Bing has failed to take away meaningful marketshare from Google by MSFT’s on admission https://www.theinformation.com/articles/microsoft-eyes-firefox-search-deal-as-bing-chatbot-gains-sputter https://www.theinformation.com/articles/microsoft-eyes-firef...
- mrtranscendence 3y ago
  Anecdotally, after the first wave of excitement I don’t know anyone who still uses Bing chat. The value add in chat-augmented search isn’t huge IMO, and forcing the use of Edge doesn’t help.
  - stOneskull 3y ago
    it works a lot better than bing search at least
  - vstollen 3y ago
    I find lots of value in chat-augmented search. But, Bing is not ready yet. It is slow, hallucinates, only vaguely cites its sources and is therefore not trustworthy. On the other hand, I am really happy with https://phind.com https://phind.com and find myself using it if I struggle to understand some concept. For me, the power of the chat based apps is that I can explain my mental model and they can directly build upon that.
- quickthrower2 3y ago
  Restaurants didn’t kill the supermarket. I still use Google, but sometimes I use ChatGPT where I may have used Google. But having said that we are still early. If ChatGPT gets access to current information and can quote sources, pull out pertinent parts of web pages, etc then I might stop using Google. That would be like a restaurant that lets you eat then leave with your weekly shop but at costco prices.
  - Andrex 3y ago
    I feel like my Google searches are too short and precise in general; if I were to try getting the same information from an informal AI chat, it's a huge loss of productivity and efficiency I'd imagine. Google: "<local restuarant>" = Full page of information including reviews, links to order delivery, directions, etc. All in a standard UI that doesn't change from restaurant to restaurant. Muscle memory takes over. ChatGPT: "Tell me about <local restaurant>" = Blurb of text that may or may not be useful. People, including myself, have asked Google a lot of straight-up questions over the years, and those use cases match well with generative AI. But the overall point of a search engine is to find something on the internet, and I don't think that's going to go away.

Bing doesn't need to win — they just want Google to be a little less profitable.

by marban 3y ago

Bing doesn't need to win — they just want Google to be a little less profitable.

Or a lot less profitable. “From now on, the [gross margin] of search is going to drop forever,” Nadella said in an interview with the Financial Times. “There is such margin in search, which for us is incremental. For Google it’s not, they have to defend it all,” he added, referring to the competition against Google as “asymmetric”. https://www.ft.com/content/2d48d982-80b2-49f3-8a83-f5afef98e8eb https://www.ft.com/content/2d48d982-80b2-49f3-8a83-f5afef98e... https://archive.is/4JOW1 https://archive.is/4JOW1 It's 50% of Google's revenue, and they'll suffer immensely if this goes away.

jjeaff 3y ago
I'm curious what the 50% figure includes? Because my understanding is that about 60% of Google's total revenue is search ads, and if you include network ads (which would be relevant since they are at risk from AI as well) then it is more like 70%.
- joelcloud 3y ago
  Adsense revenue from different websites will drop because it will be summarized and cost per query will go up. This AI push will backfire
  - wbl 3y ago
    The buggy wip maker couldn't have stopped Ford
    - somat 3y ago
      A strangely mixed metaphor, and incorrect, the buggy manufacturer did well enough... for a while at least. https://en.wikipedia.org/wiki/Studebaker https://en.wikipedia.org/wiki/Studebaker
      - TylerE 3y ago
        Not a mixed metaphor, it’s a standard phrase. Note buggy WHIP makers, not buggy makers.
        somat 3y ago
        It is mixed because it is comparing two different class of items whips to cars does not really compare. Cars to buggies would compare or perhaps whips to steering wheels.
        stonogo 3y ago
        No, it's not mixed. It's related to the saying about the people who get rich off a gold rush being the ones who sell shovels. In the buggy-whip case, it's about a company not understanding the market changing entirely to make them obsolete. The transportation market moved to cars, and so nobody needs a buggy whip.
      - AndrewKemendo 3y ago
        Watch the movie “other people’s money” for the original reference
        stonogo 3y ago
        The original reference is probably Levitt's "Marketing Myopia" (https://books.google.com/books?id=Zn4foOUm3AoC https://books.google.com/books?id=Zn4foOUm3AoC). Levitt uses it to illustrate that companies should focus on customers rather than products.
        AndrewKemendo 3y ago
        Well OPM came out in 1991 so I doubt it. https://youtu.be/62kxPyNZF3Q https://youtu.be/62kxPyNZF3Q
        stonogo 3y ago
- perelin 3y ago
  There is a good visualization of Googles income statement here https://www.reddit.com/r/dataisbeautiful/comments/xjbpfo/oc_advertising_is_the_majority_revenue_and_profit/ https://www.reddit.com/r/dataisbeautiful/comments/xjbpfo/oc_... looks you are about right
hgsgm 3y ago
I'm surprised that a court-proven antitrust violator Microsoft would speak so openly about abusing it's dominant position in a different business to finance dumping a different product at low price to destroy a competitor.
- akdor1154 3y ago
  I was surprised as well for the same reason.. but then I thought about how Google has directly attacked Office, Windows, and Windows Mobile in a pretty similar way.
- zeusk 3y ago
  Like google was being a saint to Microsoft with Chrome and their web properties on Windows Phone.

jimsimmons 3y ago

At least on HN can we stop parroting this supposed open book strategy from 5D chess Nadella? Bing has failed to take away meaningful marketshare from Google by MSFT’s on admission https://www.theinformation.com/articles/microsoft-eyes-firefox-search-deal-as-bing-chatbot-gains-sputter https://www.theinformation.com/articles/microsoft-eyes-firef...

mrtranscendence 3y ago
Anecdotally, after the first wave of excitement I don’t know anyone who still uses Bing chat. The value add in chat-augmented search isn’t huge IMO, and forcing the use of Edge doesn’t help.
- stOneskull 3y ago
  it works a lot better than bing search at least
- vstollen 3y ago
  I find lots of value in chat-augmented search. But, Bing is not ready yet. It is slow, hallucinates, only vaguely cites its sources and is therefore not trustworthy. On the other hand, I am really happy with https://phind.com https://phind.com and find myself using it if I struggle to understand some concept. For me, the power of the chat based apps is that I can explain my mental model and they can directly build upon that.
quickthrower2 3y ago
Restaurants didn’t kill the supermarket. I still use Google, but sometimes I use ChatGPT where I may have used Google. But having said that we are still early. If ChatGPT gets access to current information and can quote sources, pull out pertinent parts of web pages, etc then I might stop using Google. That would be like a restaurant that lets you eat then leave with your weekly shop but at costco prices.
- Andrex 3y ago
  I feel like my Google searches are too short and precise in general; if I were to try getting the same information from an informal AI chat, it's a huge loss of productivity and efficiency I'd imagine. Google: "<local restuarant>" = Full page of information including reviews, links to order delivery, directions, etc. All in a standard UI that doesn't change from restaurant to restaurant. Muscle memory takes over. ChatGPT: "Tell me about <local restaurant>" = Blurb of text that may or may not be useful. People, including myself, have asked Google a lot of straight-up questions over the years, and those use cases match well with generative AI. But the overall point of a search engine is to find something on the internet, and I don't think that's going to go away.