Malcolm Owen
Despite Microsoft's overwhelming lead in installed computer operating systems, Microsoft CEO Satya Nadella testified that the Apple-Google default search deal has unfairly hurt Bing badly.
Nadella took to the witness stand on Monday, offering testimony in the Department of Justice's antitrust lawsuit against Google. In his comments, he explained how he believes the deal between Apple and Google to have Google the default search engine in Safari was harmful to Bing, Microsoft's own search service.
Due to the default agreements, "you get up in the morning, you brush your teeth, and you search on Google," Nadella said according to the Wall Street Journal. "With that level of habit forming, the only way to change is by changing defaults."
Microsoft was therefore in a "vicious cycle" due to Google's massive 90% market share, since it could continue to improve results and earn more revenue, which then is used to improve its results and maintain its monopoly.
Nadella also declared that the thought of there being real choice for consumers in the search engine market is "bogus."
According to Statcounter, Google.com has an 83.27% market share of the global mobile search engine market, excluding regional variations, while Bing only has a 0.46% share. On desktop, Google.com has 74.34%, Bing has 8.15%.
On desktop, Chrome is the most popular browser at 64.31%, with Safari at 12.46, and Microsoft Edge at 10.64%. However, Microsoft's Windows has the largest desktop operating system share at 68.44% while macOS is 20.14%.
The criticism of the arrangement from Nadella is apt, given Microsoft's history in the browser wars. At one point, Microsoft agreed to provide a browser ballot, allowing users to freely choose which browser to install onto Windows, rather than defaulting them to Internet Explorer.
And, Microsoft now has a larger percent of operating systems installed on computer, than Google has for search on Desktop.
An AI query
The testimony also arrives after a report that Microsoft discussed selling Bing to Apple in 2020, but discussions never left the exploratory phase.
Questioned for about an hour, Nadella was also asked whether innovations in AI could be used to beat Google. Nadella referred to search as "the biggest no-fly zone of all," in that there are limits as to what AI could do to change the search market.
"The distribution advantage Google has today doesn't go away, in fact, if anything, I worry a lot that - even in spite of my enthusiasm that there is a new angle with AI - this vicious circle that I'm trapped in could even become even more vicious because the defaults get reinforced."
During cross-examination, Google lead trial counsel John Schmidtlein offered that Microsoft "was caught sleeping when Google introduced Chrome." Nadella agreed in part to the point, responding "Google did a good job of innovating in the browser."
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21 Comments
I used to consider Microsoft to be an evil empire, out to destroy the Jedis at Apple.
But then in 1988, I saw Windows 3 running at a demo at the old Elek-Tek store in Chicago, and thought to myself, "self, there's nothing like this at Apple!" and spent $3,450 for 50 shares of MS at $69.00 and still have it. After reinvesting all dividends until 2019, I now own 1,630.352 shares due to splits, and that investment is now woth $524,647.27 as of today's close (I also re-invested in Apple Inc. when Jobs returned, and no complaints there, either).
So say what you want, I hope MS wins. Apple isn't going to suffer any loss if they lose, since Bing or Google, doesn't matter to the bottom line. To paraphrase the late great Roberto Clemente, "Microsoft been very, very good to me." And I think Satya Nadella is an even better CEO than Gates, certainly by the sheer numbers!
Irony notwithstanding, all that matters is how truthfully he answers the questions while under oath.
Says the CEO of a company that literally has dominated the computer OS scene. Because of that domination killed of Lotus 1-2-3 with Word/Excel/Powerpoint … And did exactly the same with collaboration and Teams … all because they bundled everything together … boohooo cry me a river. Yes Zoom had a short lived success in the beginning of the pandemic, but the platform power of MS quickly ended that.
The case against M$ made Gates look like a maniac and the stock performed like a bond for 15 years after MS lost.
This will take a decade, it will get ugly, but Google is a company without friends. EU has started doing 9-digits fines and US will take it further.
So.. we can expect more competition in search. It just won't happen tomorrow.
Whatever you say, Satya.