Microsoft: Frequent Searcher Points and Free Enterprise Search

October 1, 2008

Ina Fried’s “Microsoft Still Paying People to Search” is a useful reminder that Microsoft is “still paying people to search”. You can read various wizards’ comments at Search Engine Journal, LiveSide, and others. I quite liked the approach taken by Nathania Johnson, Search Engine Watch, in her “Microsoft Launches SearchPerks; Like Credit Card Rewards, Except for Search here.” For me, the most interesting point in her write up was this passage:

Microsoft’s Frederick Savoye, senior director at Live Search, assured me that this is an incentive program that fits into their three overall pillars of search: [a] Delivering the best search results [b] Simplifying key tasks such as booking airline, travel, shopping, finding user opinions, etc.  [c] Innovating the business model. (Note: I did a bit of format tweaking to keep the passage from becoming hard to read]

The announcement comes hard on the heels of the news that Microsoft will be hurt by the financial problems sweeping through the US and threatening the European markets (more information here) and that Microsoft will make Oslo, Norway, the pivot point for its search research (more information on that here).

I wanted to offer several observations before the addled goose brain I have forgets them.

  1. Frequent flier blues. Earning points for search is a good idea. I have quite a few air miles, but the airlines change the threshold for an award or retire the miles before I can use them. I am, therefore, deeply indifferent to usage credits because of how other customer reward programs have tricked me.
  2. Can’t buy me love. I am a rental. I sell time. When someone buys my time, I love them. When that someone doesn’t pay me, I don’t love them. As long as the pay is commensurate with the work, I go along with my rent-my-time approach to business. I don’t think the dough offered for me to change my habits, the automated scripts, and the free Google crawls I run every couple of hours is sufficient for me. For a critical mass of Web users, I am skeptical. I don’t think payola will work in search, but it worked for a while in radio someone told me.
  3. Business model silliness. Google’s business model is that someone pays Google to give away services. Users of Google expect free or low cost services to avoid the ads. Giving away free services without a third party paying or just paying people to use a service is not a business model. The tactic is marketing. I see these ploys as a type of discount coupon for tires, “Buy three and get one free”. The cost of the fourth tire is covered in the markup on the first three tires, the extra charge for balancing, or the labor cost to undo the lug nuts and put the new tires on.

In the consumer Web space, Google maintains and may be incrementally increasing its market share. I think that some of the research outfits tracking Web search share report that Google is north of 65 percent of the search traffic now. I have some first hand and anecdotal data that indicate the 65 percent figure may be low. From where I sit in my Kentucky hollow with my geese, Google’s market share in Web search is close enough to two-thirds for me. With Ask.com, Microsoft, and Yahoo chopping up the remainder, paying users probably won’t have a significant impact. Users choose what to search. Once habits in online form, those habits can be tough to change. The malarkey about search being a one click easy decision does not reflect the fact that “habits, like a soft bed, are easy to fall into and hard to get out of.” That’s a quote from Miss Costello’s sixth grade classroom poster. Miss Costello was my teacher in the 1950s. Pretty accurate statement for Web search I believe, even 50 years after I first read the message.

A quick horizon scan reveals that in enterprise search, the “give away” approach to market share is keeping Microsoft in the enterprise search game. But vendors tell me that sales of their SharePoint search plug ins continue to sell. What vendors are reaping the rewards of the SharePoint search opportunity. I can’t include the dozens who play in this space but Coveo, Endeca, ISYS Search Software, and Vivisimo have told me or hinted that SharePoint represents a good market. In fact, one vendor told me that the SharePoint market is stronger since Microsoft rolled out free SharePoint, enhanced MOSS, and bought the complex Fast Search & Transfer Enterprise Search System. In one engagement, the vendor was hired quickly, replacing the incumbent Microsoft system with minimal red tape. In the enterprise search sector, where user annoyances are commonplace, Microsoft is not yet paying people to use its search system, but Microsoft may have to take more aggressive steps to keep third party vendors out of the SharePoint members-only club.

To sum up, the search game for the Web and in the enterprise are quite different. Microsoft will have to find a way to leap frog in both markets. That will take some doing. I am excited to learn what Redmond will do on both search fronts. Google, of course, has a more integrated approach to search, which I think may present both technical and cost challenges to Microsoft.

Stephen Arnold, October 1, 2008

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