Androids, Bing and the Next Big Fight

It seems like the early rumors were not accurate and Bing is not really going to replace Google search in Verizon’s Android phones. But this discussion misses the point completely: Microsoft is willing to pay a lot of money to get its Bing services into Android phones. People are touting this as “Google spent R&D dollars, now Microsoft is reaping the benefits.”

Honestly? I wish Microsoft would reap the benefits. The real benefits. If the Kin had been developed as an Android (reminder: an open-source operating system for smartphones) with some extra widgets I would be delighted. On my Motorola Droid 2, equivalent widgets are available to many of the things the Kin had (social networking widgets, contact widgets, etc.) Let me repeat that — Motorola, a hardware company, managed to outdo Microsoft Kin’s software. That’s because Motorola could leverage the Android OS.

If Microsoft is investing heavily in getting Bing on Android smartphones, this means that it gave up on the battle on Windows 7 phones. I hope they do — that’s more interoperability, and in the end, Google will still win. Why? Because in three years, smartphones will be <$100, even unsubsidized. They will all run Android, except iPhones. Microsoft will pay the handset makers if it wants to put Bing on their phones, and even more for them to hide/disable Google search. Handset makers compete in a tough market — if a given handset will be known as “better search”, it will have an advantage. So either Microsoft Bing Search will be as good as Google’s (but then, why pay for anything other than a small premium on being the default) or handset manufacturers will hesitate on disabling Google search.

Microsoft has finally ceded the OS wars, and is trying to compete on Google’s turf, where it is the newcomer in a game with a competent player. If Windows 7 Phones had won, do you suppose there would even be a question on where the default search would have led? Google needed to spend the money on Android R&D to get to a level playing field. I think their investment will pay off, but whether it does or not, it was still a necessary move. It took the war from OSs, where MS had a traditional advantage, to search (quality and ad-based compensation), where Google is leading.

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3 Responses to Androids, Bing and the Next Big Fight

  1. herenot says:

    “If Microsoft is investing heavily in getting Bing on Android smartphones, this means that it gave up on the battle on Windows 7 phones”

    well. maybe. it doesn’t really matter one way or the other.

    ” in the end, Google will still win”

    win what?

    ” if a given handset will be known as “better search”, it will have an advantage”

    1. I doubt people will care. if people would care about “best X” we would not be in a 95% windows PC world.

    2. Bing search is only the first “lock”. how does excluding androids market and installing a verizon walled garden market sound?

    http://androidandme.com/2010/09/carriers/v-cast-app-store-to-compete-with-official-android-market/

    “handset manufacturers will hesitate”

    they will do what ever the carriers ask them. the carriers have a bigger influence on handset sales then retailers or independent marketing. do you remember who holds the trademark “droid”? (hint: NOT motorola).

    from a strategy POV I think that google might face a serious strategic problem .android winning looks like it might turn out to be a pyrrhic victory for them. they pissed Apple by developing android, they are pissing the carriers with GV, and microsoft might use android as a judo-esque way to kill google’s revenue sources from mobile.

    Balmer might not be as stupid as he might have seemed.

    • moshez says:

      I’m not sure what you mean by “judo-esque”, and I think this is the central argument here.

      Microsoft has conceded the OS dominance game in the newest PC (reminder: “PC” stands for “Personal Computer”) market to an Open-Source OS, and is now trying to win the search-and-applications game on top of it, against an entrenched competitor. That’s not judo-esque — that’s choosing your battlefield poorly. It’s not the same as throwing the battle, true. But it is Napoleon invading Russia (I mean that almost literally — lots of bloody wars, both sides claiming victory, but Napoleon’s army ultimately weakened enough to not matter anymore)

      The carrier war is a simple bidding war — and the MS and Google warchests being roughly comparable, it boils down to who can make the most ad revenue from a given user (because the carrier will want to share in the bigger revenue stream, no matter how it’s packaged). This is a market in which Google has shown technical dominance for a while, with about 10 years more experience at targeting ads than Microsoft.

      Google didn’t develop Android to beat Microsoft. Google developed Android to level the playing field against Microsoft. Balmer has just stepped into the level playing field. When was the last time Microsoft won a level playing field?

      An aside, re carrier vs. handset makers: the battle here is interesting, because a lot of it is about price points, and a lot of the important parts happen outside the US. In most of Europe, carriers are not allowed to sell phones, only SIM cards. Handset manufacturers, other than Apple, all consider the European market just as highly as the American market, and so will tend to have open, cheap handsets. Once the price of a handset falls below a magical line (I’ve heard the numbers $100, $89 and $50 bandied about), the carrier *loses all power*. For $100, a lot of people will be happier to buy the phone directly from the handset makers, because features like VOIP (open, not artificially handicapped), Mobile Hotspot (ditto) and similar will be disabled by carriers. Sure, when it’s a $100, lots of carriers will hawk it as a “free phone, just a 2-year contract”, but they’ll be limited in how much they can annoy their customers to a $100-worth of annoyance.

      • herenot says:

        “I’m not sure what you mean by “judo-esque””

        I mean the Judo tactic of using the opponents wight and force against him.

        “Microsoft has conceded the OS dominance game in the newest PC ”

        I don’t know why you keep saying that. they did no such thing.

        I wouldn’t bet against win7mo just because MS develop software for a different platform. by this rational MS have given up on windows since they have office on macs. win7mo might fail, but I don’t think MS are throwing the towel just yet.

        “This is a market in which Google has shown technical dominance for a while, ”

        you have a good point there. I know MS have been spending a shitload of resources on search an search based marketing, but it remains to be seen if they can compete with google on that front. I guess the verizon-bing thing is a way to test the waters for verizon. in anycase the competition will hurt google since the carriers have leverage against a google-search monopoly. I wonder if there’s ANY revenue sharing between google and the carriers now, but there probably will be in the future.

        ” Google developed Android to level the playing field against Microsoft”

        agreed.

        regarding hand-sets vs carriers – I don’t know. but looking at nokia’s performance isn’t convincing me that you’re right there.

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