Microsoft takes on Google as office moves to web

Microsoft Corp will release three versions of its dominant Office software that users can access over the Web, catching up with products that rival Google Inc launched three years ago. The news helped send shares in the world’s largest software maker up up 2.7 percent by midday, more than double the gain in the Nasdaq Composite Index.
It is the latest salvo in an intensifying war between Microsoft and Google.
Google announced plans last week to challenge Windows with a free operating system. Microsoft introduced a new search engine, Bing, last month.
Microsoft is finally making the conversion through the Web-based world. First, we saw that through Bing. Now we are seeing that through Office.Microsoft will offer for free to consumers Web-based versions of its Office suite of programs, including a word processor, spreadsheet, presentation software and a note-taking program.
Microsoft will also host one Internet business version of Office at its own data centers, charging companies a yet-to- be-announced fee. Companies with premium service contracts will have the choice of running a second Web-based version from their own data centers at no extra cost.
The company hopes to make money by using the free software to lead users to its ad-supported websites, including Bing. Analysts have said that Bing’s early signs of success suggest Microsoft may be rounding the corner in efforts to turn around its money-losing Internet division.
Still, a free version of Office could hurt sales of Microsoft’s top-selling and most profitable unit. One of Office’s most popular titles is a home version that sells for $150. It includes the four programs that Microsoft will give away.
“Microsoft is in a tough spot. Their competition isn’t just undercutting them. They are giving away the competitive product,” said Sheri McLeish, an analyst with Forrester Research.The Office division rang up operating profit of $9.3 billion on sales of $14.3 billion in the first three quarters of the software maker’s current fiscal year.
McLeish expects Microsoft to overtake Google in the market as the hundreds of millions of people who use Office flock to try out the Internet version.Microsoft will release the web offerings when it starts selling Office 2010, it next major release of the product, sometime in the first half of next year. Its current version came out in January 2007.
The software maker unveiled an early release on Monday at a conference for business partners in New Orleans. It will be distributed to tens of thousands of testers.Company spokeswoman Janice Kapner said the free Web version will provide “a very rich experience” and probably have more functionality than Google.
Office 2010 is among a wave of upgrades to Microsoft programs planned over the next year. A new version of its ubiquitous Windows operating system is coming out in October and a new version of its widely used email server is also in the works.
Microsoft shares rose 2.7 percent to $23, while the Nasdaq was up 1.2 percent at 1777.50

Measuring Success: Microsoft Bing

Microsoft Bing has been on air for some time now. It has created some flutter and some clutter as well. This post examines how successful has Bing been in its long term approach in its quest to break from third place behind Google and Yahoo!

June is the first full month the Bing “decision engine” has been live. Microsoft positioned the Bing as Decision engines meaning that its search results would allow depth of knowledge and information rather than width.Microsoft said Bing is aimed at online shoppers and will initially focus on helping people make buying decisions, plan trips, research health matters, or find local businesses.

Microsoft is reportedly spending 80 to 100 million dollars marketing Bing but has not publicly disclosed its promotional budget.

Achievement till date: The number of people that used Bing in June for online searches was eight percent higher than the number that used its predecessor, MSN Live, in the same month last year, according to Microsoft. Google’s share of the US online search market was approximately 74 percent.Yahoo! remains the second most popular search engine with about 16 percent of the US market, and Bing is third with 6.5 percent, according to Compete. Figures released in recent weeks by industry analytics firms reveal mixed data, leaving it unclear whether Bing is doing much to close the gaps with Yahoo! and Internet search king Google. Other Internet-tracking firms report different figures, with the ranking remaining constant but conflicts emerging as to whether Bing is gaining, holding, or losing ground.

It’s really too early to tell how Bing is doing; the numbers are really mixed. Microsoft does deserve to pat itself on its back a bit. Bing seems to have had some lift but it is not an extraordinary amount. An increase in visitors is not surprising given the marketing they are doing.

Analysts believe Bing is more likely to lure users away from Yahoo! than Google, which is woven into people’s lives so thoroughly that the company’s name is used as a verb to express the act of searching the Internet.

The next big goal for Bing is not to beat Google, but to beat Yahoo! If they can’t get to number two, then getting past there is much harder.