The David & Goliath Search Match-Up – Microsoft Vs. Google


Since Google does not share its search volume data, we are left to estimate and that estimate ranges from about 63 to 99 thousand searches every second or about 6-7 billion every day.

We know more about Market share and, according to Statista, Google has 85% of the search market with an annual global search revenue of 289 billion.  Also, according to Statista, Microsoft’s Bing now has a market share of 9%. This is up from 5% in 2019.

So, the Goliath in our match-up, aka the 800lb gorilla, is Google, and “the shepherd boy” intending to take him down is Microsoft. To be exact Microsoft does not really intend to take Google down, but it does intend to do what no other company has succeeded in doing for the last 30 years, which is to successfully compete with them in the highly lucrative market of internet search.

Actually “search” itself is not the real the money maker but how the search results are structured on the results pages (SERPS) with advertisers bidding against each other for the top positions on the search results pages.

Microsoft’s competitive strategy was to leverage their $10 billion investment in the Open-SourceAI software, CHATgpt by customizing it for a wholly new kind of search experience that is qualitatively far superior, in my opinion, to the 25-year-old search tools we are familiar with.

I have looked at the performance behind this claim and it really delivers. The name, “Chatgpt” tells us very little, so a brief explanation is in order. Here is a good starter from the online magazine HP Tech Takes: “Developed by OpenAI, the origins of Chatgpt can be traced back to 2018, when they released the first version of their flagship platform, the Generative Pre-Trained Transformer (GPT).  A GPT is a language model, which is an AI algorithm designed to understand and generate human-like language”.

So, “Open AI” is the company, “ChatGPT” is their product which is a “platform” called “the Generative Pre-Trained Transformer” which is a language model consisting of an AI algorithm designed to “understand and generate” human-likelanguage. (my emphasis) And, I guess the “human-like language” is where the “chat” part comes in.

In any case, the key to understanding Chatgpt is that “it is an A!Algorithm designed to understand and generate human-like language”.

I am not sure what Microsoft got for their $10 billion but a major piece of it had to be the Chatgpt customized for search, maybe a ChatGPT2.

Anyway, here are the basics of how Microsoft plans to revolutionize “Search” with Chatgpt.

  1. Because it can understand language, you are able to ask it Questions, even complex questions,which it can understand, and it will generate Answers in human-like language.
  2. You are able to Chat about the answer you received. Example: “I never heard of that manufacturer, please tell me something about them including how they are rated by Consumer Reports, their price compared to their competitors, what are the major negative reviews, shipping costs, delivery time, and warranty period.
  3. You can Create itineraries of things to do or places to visit for any location in the world, create a list of rivers in a state or in a country, make a list of songs by a given artist, make a list of materials you will need to climb Mt. Everest, and almost anything you can imagine.

AI and the Edge Browser

Besides using AI with their Bing Search Engine, Microsoft will also be using it with their Edge browser, so if you are looking at a 40 page year end report and prospectus from your favorite corporation, but only want to see a summary just open the sidebar and request a summary report and in seconds it will create one in bulleted detail.

Or you can do a similar summary of any other document or article. Remember that it has been “trained” to read, understand, and answer in a variety of ways including by doing a summary.

So, what is Google Doing?

Google has also been getting into the AI business with a product called “Bard” and reports that it has been experimenting with it for the past 2 years. But in a rush to market, Google reported in a promotional video shared on Twitter an incorrect answer from its “Bard” product that cost it 9% of its market cap or $100 billion 2 days later, while Microsoft’s rollout a day later increased their market value by 3%.

But Google has such an advantage in its long-standing user base that their AI product will capture a large market share of the new AI business with an overwhelming lead in browsers (Chrome) and search engines (Google) before Microsoft can convince enough users to switch to their search engine, Bing and browser Edge. Google also has the money to invest to play catch-up if it needs to.

But if the Microsoft product is superior in features, user interface, and user experience, etc., any loss of Google market share will be hard, if not impossible, to win back. Google could lose significant market share (10% or more) over the next year and give Microsoft a great year after year return on their 10 billion investment.

Quoting from another area of the above highlighted article “An AI dance of giants is Underway”, or, as our title has it, at least another epic battle between a modern David and Goliath. So, breakout the popcorn. This should be fun to watch.

As always, stay safe and pray for Ukraine!