Bing To Destroy Google With Free Adwords

by Ruud Hein April 14th, 2010 

Bing tries to be a better search destination. They compete with Google on search.

Thats wrong.

Googles business model isnt search. Googles business model is selling and displaying ads.

By taking a page out of Googles own playbook, Microsoft can destroy their archenemy.

Bing trying to challenge Google by michperu.

Googles Predatory Playbook

Google makes money by selling and displaying advertising via a fully automated setup.

To continue to increase revenue they continue to sell more ads. To continue to sell more ads they need more advertisement space. And to increase the amount of valuable (eyeballs!) ad space, they need more advertisement vehicles or channels.

Googles strategy to increase the reach and breadth of its ad space is to destroy other monetization models. (Get it why you cant sell links? why paid content is bad? why thin affiliates should disappear?)

Their preferred tactic to destroy or reduce existing business models in the target market they enter is to launch a good enough duplicate product or service " and offer it for free.

Um, what? by veen.

Googles zero-cost model means their offer is win-win, even when failing.

Any ad click is profit. And if successful, the other players in the market have to change their premium model either by lowering their prices (thus eliminating a perceived value difference between them and Googles free offer) or by going ad-supported freemium: hello Adwords or DoubleClick or

Make no doubt about it: Google has no scruples in this area and will go as far as to offer the companies which business theyre destroying an ad-split.

The Destroyer Destroyed

If its all about the ads, if 97% of Googles revenue comes from advertising, then the target is advertising, not search, and the tactic is Free.

By turning the tables, making strategic alliances, and where needed dipping into its war chest, Microsoft can undermine, if not destroy, Googles business model.

How?

Microsoft has a war chest half as large as Googles. They have twice the assets. They could buy Google and have money left.

Set up a free, points-based ad auction system modeled after Adwords: give advertisers what they want for free. Then, pay publishers on the click.

Approach large Adwords advertisers: make exclusive deals with them.

Find hurt folks and strike up strategic alliances: I know of a couple hundred news outlets that will love to help you.

Turn it into a community effort; have your efforts go viral.

Beat them at their own game and introduce your own less-than-free by dipping into your war chest.

How would you go about competing with Google? Can Google take away what you do right now in a heartbeat?

Ruud Hein

My paid passion at Search Engine People sees me applying my passions and knowledge to a wide array of problems, ones I usually experience as challenges. People who know me know I love coffee.

Ruud Hein

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28 Responses to “Bing To Destroy Google With Free Adwords”

  1. Yura says:

    How would Bing battle AdWords, if it doesn't have Google's traffic and website network?

    Sure, making ads free would help that, but not incredibly without substantial effort.

    Then again, it's hard to take away traffic from Google without being a good search engine. Possibly, Bing might build a better search by being customer-oriented and not compromising search quality to increase ads CTR, like Google can do.

    • Ruud Hein says:

      It could quickly have such a website network if it would pay for it.

      Search is brand. You can't easily touch Google's brand right now so investing in search doesn't get a company anywhere near them. Sawing the legs away from under them the way they do with other companies … *that* would get you near them :)

    • Protection says:

      I agree, Bing could not destroy Google without a very profound and substantial effort. Still, I expect the article wants to make people reflect on the matter and it also mentions some very strong and thought ideas. Nice read.

  2. Samuel Lavoie says:

    Don't see that even possible in the next few years if they don't buy or do a big risky move. They just don't have the Search traffic and reac especially Worldwide as Google is heavily dominant (about 90% in Canada).
    The ad price is not the differenciator here I think. Company will built online brand around PPC with word of mouth, local, etc. or die… :)
    .-= Samuel Lavoie recently posted: Montreal 2010 Web Conference and Events =-.

  3. Ruud, great work. I love your synopsis of the situation (AKA Google's master plan) as well as the calling out of Microhoo on how to overtake them.

    What I can't figure out is who I trust less with all of my data, Google or Microsoft? :-)

  4. Ross Dunn says:

    Great article Ruud. It is a smart move which means Microsoft probably won't go for it ;-)

    PS…

    "Sawing the legs from under them"… LOL, is it just me or did visions of the movie-series Saw come to mind? Eeek.
    .-= Ross Dunn recently posted: Facebook’s Growth is Not as Viral as Expected by Dr. Phil Zeman =-.

    • Ruud Hein says:

      I don't expect anyone in business to have the balls to go for a plan like this. It would cost a lot of money. So… maybe a consortium could do it :)

      Seriously, every time we're talking about a Google killer and we mean search — we're comparing apples and oranges. We don't need a search Google killer; we need an advertisement Google killer.

      Make an alliance with newspapers that are losing out to Google anyway and have them offer ad space for free too.

  5. Yura says:

    Not quite sure, Ruud.

    Google has quite a volume and a brand that it's hard to kill off the income stream completely, and it already has lots of earned cash, a few other platforms to sell ads on and the remaining 3% of non-advertising income.

    Also, without killing off search, Google will still have leverage on the website/business owners. They might require a minimal fee (#0.05 for any click) for businesses to use an easy to use ad management tool (AdWords), for example.

    Not to mention, if you can advertise on Bing for free and for a fee at Google, where would you go to get customers right now? Google is still the way to go (with Bing as a supplement), because it has search traffic, so there's no way of killing Google without killing it's traffic.
    .-= Yura recently posted: About Yura Filimonov =-.

    • Ruud Hein says:

      It's not needed to kill off their income stream completely. Just cheapen their product, crush its price towards free. Compare with: analytics or GPS. If needed, less-than-free: if Google goes free too, *pay* advertisers to use Bing. Go for their Achilles heel first (income). As the structure starts to crumble the rest (traffic) will follow

  6. Niek says:

    Google earns most of its advertising revenues on its own sites.(source: http://www.businessinsider.com/chart-of-the-day-in-case-you-had-any-doubts-about-where-googles-revenue-comes-from-2010-2)

    So I'm doubtful about whether this approach would work. They will not lose these revenues when Microsoft is going to offer free advertising. It still is about the brand and which of the brands(Google, Bing, Yahoo) is used by most people. As long as Google is the most popular search engine Microsoft will not beat them. Not even with free adwords.

  7. Catalin Trif says:

    I think a way to do this is to capitalize on Adsense's issues. Adsense today is a business model, but for many people it's a shaky business model at best.
    Come with a competitive Adsense alternative for the small publishers and build a content network that would later on be the engine of creating a powerful economy behind Bing's ads.
    .-= Catalin Trif recently posted: How to Get the Most Data out of Your Keyword Research Efforts =-.

  8. Anyone that thinks Google is completely unmovable when it comes to top dog status is wrong.

    As you've rightly pointed out, Microsoft have the capital to take Google out and then stop off at a Michelin Star restaurant on the way home.

    However, that state of affairs won't last forever. The longer MS wait to try something like you're suggesting, the smaller the gap between their assets and Google's.

    Should be an interesting few years.

  9. I think it would be pretty interesting if Bing offered free services to fight with Google. It would put a dent into them for sure but whether it takes them off of their high horse is another story.
    .-= Maciej (ma-chi) recently posted: Keep Your Name Online Clean =-.

  10. What a really, really interesting thought! Amazing idea. It would be great if Bing really offered G some competition!

  11. Jonas says:

    Free ads will just get you that far, imagine hundreds, thousands of developers competing for the same ads – the outcome won't be any better than say going to the nearest dofollow blog for the occasional free backlink.

  12. X says:

    The only problem I have with this premise is that Microsoft, with more power, is a better thing for all of us. I don't know about that.
    .-= X recently posted: Start Your Own Social Web 2.0 Niche Network =-.

  13. Hi Ruud, some interesting thoughts – although I have to disagree. The problem with the idea is you're basing Google's success on their ad model – sure, that's where they get their revenue from but their business model is not search and it's not advertising, it's acting as the catalyst between advertisers and searchers.

    A competitor would need to do both aspects better to win out, so Bing needs to find a way to attract the audience as well as the advertisers. Even offering free ads in exchange for exclusivity wouldn't necessarily work – free ads with no-one to click on them are worth much less than paid ads that people click on. And offering free ads to major players isn't going to anything to drive search traffic.

    This is where Google wins, people don't search – they "Google". And until they "Bing", Miscrosoft are going to be second place.

    • Ruud Hein says:

      But competing on search is "easy" in that quality isn't the problem; branding is.

      Over the years I've made several trips to other search engines, always coming back to Google. But I've switched to Bing in October 2009 and am still using it. You're talking to a hard core Google user here … and I took at least 2 people with me.

      In my case I was fed up of the ads on Google: the actual search results are off to the left while the ads are almost right in the center view. This "in your face" stuff bugs me :)

    • Tom Mercer says:

      Ruud wrote: "this in-your-face stuff (ads) bug me"

      @Ruud Install an Adblocker. Switching search engines is not the answer to removing ads, because you'll remain captive to flash ads, Adwords content network ads, and Youtube ads, etc.

      I subconsciously felt like the internet got much cleaner and prettier in the past 9 months or so. Then I used a public computer and felt like i was sent back to 2008 *shudders* I immediately realized that the internet hadn't improved, but I had installed adblockers. Adblocking makes a world of difference in the quality of your browsing experience.

  14. Naveth says:

    how do you think microsoft plan to get the traffic. One more thing is the never say die attitude of google.They are foraying in to different areas and if successful, you will see a worthy competitor to world's biggies.

  15. David says:

    Please don't scare me.If adwords will end that means end of adsense with is the best PPC program.I don't its that easy to beat Google.Bing is nothing but a new name given to MSN by Microsoft.

  16. I don't think that any point of time, bing can overtake as brand building takes time and it will take huge amount of marketing from their side to make bing a good search engine in the eyes of people.
    .-= Computer Forum recently posted: Top 10 Digital Cameras to buy in 2010 =-.

  17. stacey says:

    If Bing could successfully start such a Ad Campaign then it would be good for customer because Google is very expensive at times. Not to mention this company really does have a monopoly on the Ads Campaign world.

    Stacey
    http://www.blogwrite4.com

  18. Chris Leone says:

    Interesting premise, Ruud, but I also disagree. It feels like you're putting the cart before the horse. While Google gets most of its revenue from advertising, the primary reason the advertising model works is because of Google's volume and network Google (and it is a very, very well designed system). The day Bing has a better search engine is the day Bing starts taking over market share. The day Bing takes over market share is the day advertisers start advertising more on Bing.

    Google's brand is based on the quality of their products. In this case, the quality of their product is based on the relevance of their search results – both organic and paid.

    Everyday, Google is one click away from the road to bankruptcy. All it takes is for someone to type "bing.com" instead of "google.com." When that happens, and the eyeballs disappear from Google, the money is going to Bing.

    If Bing wants more market share and more ad revenue, they need a better search engine. The way and speed information spreads today, it won't be long for everyone to know there is a better alternative. But it has to start here.

    • Ruud Hein says:

      @Chris but if unbranded tests show people can't pick their favorite engine and branded tests show people pick their brand, not the results — then competing on better search results is useless, no?

  19. Mike says:

    I'd say Bing already has the better search engine! Bing's search results are substantially cleaner and more relevant than Google's. Google's algorithm is way, way over over cooked, and they continue to over cook it with every new tweak… Go "BING"!

  20. Mikey says:

    So, this page is a little stale but even after all this time it is still relevant so here is my 2 cents.

    Your theory is interesting but the problem is that people, in this case webmasters and advertisers, will just take the free stuff as a bonus and keep using the big G for paid advertising. Why? Because 95% of the population use it to find what they are searching for.

    The way to put an end to Gooogle (and their God-like attitude of picking winners and losers) is to BOTH give people a better solution, and remove their motivation for using the big G.

    Bing, has now come a long way and is starting to get really close to providing a better user experience with better search results…and it shows in their increase of market share lately.

    As more and more people learn of how Google does business, how they rig the game and how Adwords exists only as long as there is a constant supply of new victims to take advantage of (and drive up the cost beyond real market value) … people will slowly start to abandon them. Add in some PR about how Google supports communism (true), hates old people, children & dogs (assumptions) and whola, you have the making of a new movement against Google.

    And, this would be a good thing. Once the monopoly of the Big G is broken, the real free market will take over … and the world will be a better place.

    • Ruud Hein says:

      This has definitely gone another way so far. In large part because the thought leaders at Microsoft all seem to be going in other directions. I don't think everyone inside MS is as convinced about search and related areas as I would like them to be.