What happened to MSN?

The nature of the competition between Google, Yahoo and MSN is search market share. Site Seeker notes “Market share. Google, Yahoo! and MSN are all competing for our attention. More users equate to more revenue via pay per click ads and other advertising opportunities.“

There is a rolling might to Google, which has been completely unaffected by either Microsoft or Yahoo. The explanation is ethics.

McLaughlin (2002, p 117) notes that 60% of adult Internet users are unaware of search engine marketing and that only 1 in 6 Internet users can tell the difference between unbiased search results and paid advertisements. Furthermore, 80% of these users when informed, ask that search sites disclose the practices of paid placement and paid inclusion.

The FTC (see Wouster, 2005, p 3) mandates that “clear and conspicuous disclosure” is necessary for both paid placement and paid inclusion. Truthfulness and disclosure is also part of the commercial world's view of social media ethics prescribed by David Scott (2007, p 205):

• Transparency - Never pretend to be someone you are not.
• Privacy.
• Disclosure - Tell people about any conflict of interest.
• Truthfulness.
• Credit.

From the perspective of the government, and from practioners like Scott there is an admonition for truthfulness, and therefore disclosure.

Is there an impact of ethical advertising on the bottom line that would discourage businesses from applying moral principles? McLaughlin (p 119) notes that “MSN seems to serve the companies [who advertise] corporate needs as much as searcher’s interests.” On the other hand, Google is “the best of the bunch at identifying ads.” What has been the impact on market share? Stepforth has charted MSN market share for the year 2005-6.

What’s it look like over a longer haul? Worse!

Search Market Share

Year/Source ............................Google ......MSN

2004 (see Yahoo) .....................36.5 ........15.5

2005 (see Highbeam) ...............41.4 ........13.7

2006 (see Seroundtable) ..........53.7 .........9

2007 (see ReadWrite Web) .......67 ...........5.25

Conrad (1904, p 212) said, “Anything merely rational fails.” Ethics attempts to deal with the complexity of the real world. Our rational models, in order for us to think with them, are abstracted and focus on only some aspects. What we leave out can drive us to the desperation of trying to buy Yahoo.

References

Conrad, Joseph (1904). Nostromo. Wordsworth Editions Ltd (January 1, 1998)

McLaughlin, Laurianne (2002). The Straight Story on Search Engines. PC World.

Scott, David (2007). The New Rules of Marketing and PR. John Wiley.

Wouster, Jorgen (June 9, 2005).STILL IN SEARCH OF DISCLOSURE. Consumer Reports Web Watch.

Microsoft and New Media. The Yahoo! deal.

Microsoft needs a revenue source for its products and services in a future contended by Software as a Service, and one characterized by increasing acceptance of Open Source. Microsoft recently lost in its bid to acquire Yahoo with its well defined new media offerings coordinated with advertising revenue.

A Redmond Review article, (see Redmond Review Yahoo) cites physicist Mark Buchanan's report on mathematical studies of networks that show the phase of super-connected hubs (such as Google and Yahoo today) eventually give way to more egalitarian networks from the simple processes of history and growth. Many nodes connect to Yahoo or Google as a start to searching out information. However, Buchanan’s conclusion on networks is that “Whenever limitations or costs eventually come into play to impede the richest getting still richer, then a small-world network becomes more egalitarian, as seems to be the case with airports and a number of other real-world networks.”

Furthermore, according to Arms (2002, pp 211-215) there is no goal of indexing the Internet entirely by any of the search sites. There is a higher return on investment for improving the secondary aspects of the search tools so they integrate better with revenue generating functions such as advertising or sales of the web search engine for corporate knowledge management software solutions. We have reached a point where the technical costs to overcome the limitations of web search engines is prohibitive and a plateau in functionality has been set. As with airports, other sites will eventually catch up with the leaders, and not much will distinguish one from the other.

Niche search sites have established themselves as a brand. Today’s two largest super-connected nodes on the Internet get the majority of advertising revenue. However, the trends in marketing may also be working against the continuation of the current aristocratic nature of the Internet.

Marketing is moving away from mass advertising the same message to a large audience. According to Duncan (2005, pp 211-212) the value of the Internet is the ability to send custom messages to highly targeted customer segments. The reach of a relevant message to a small but coherent group is higher than a general and therefore mostly irrelevant message to a large group. As the ability to identify and verify audience characteristics for smaller, specialty sites improves, advertising revenue may shift from Google and Yahoo to this new direction.

Failure to buy Yahoo was good fortune for Microsoft, the price was dear and prospects not as profitable as imagined. Super-connected nodes in an aristocratic network often give way to more egalitarian networks over time, their advantage then lost. That time is now for Google and Yahoo.

References
Arms, William Y. (2001). Digital Libraries. The MIT Press.

Duncan, Tom (2005). Advertising & IMC. McGraw-Hill/Irwin.