Two years ago, Microsoft CEO Satya Nadella aimed to disrupt Google’s dominance in the search market through a significant AI transformation of Bing. Recent data suggests that Microsoft is making inroads into Google’s substantial share of the search market, both in the United States and globally.
This week, Microsoft announced that its search and news advertising revenue surged by $1.6 billion, equating to a 13 percent increase over the past fiscal year. When accounting for costs associated with traffic acquisition, revenue jumped by 20 percent, attributed to a rise in search volume and enhanced earnings per search.
The increased search volume has been a consistent trend for over a year. Jordi Ribas, Microsoft’s head of search, shared insights on X this week, highlighting its positive influence on overall desktop search market share. Comscore’s data indicates that Bing currently holds 29 percent of the search market in the U.S., while Google commands about 60 percent—reflecting a 2.1 percentage point growth for Bing since the launch of Bing Chat in February 2023.
According to StatCounter, Bing’s global search share has risen to 11.6 percent, marking an increase of 3.4 percentage points from two years prior. Meanwhile, Google’s share has decreased, losing 6.1 percentage points worldwide and 1.2 percentage points in the U.S.
Although these may appear to be modest fluctuations, they could equate to significant financial implications for Bing, especially as Microsoft approaches a valuation of $4 trillion. Philippe Ockenden, Microsoft’s Corporate Vice President of finance, noted during the introduction of Bing Chat two years ago that a one-point share increase in the search advertising market could yield a $2 billion revenue opportunity for the company.
However, when considering total search market share—which encompasses desktop, mobile, and tablet usage—Bing appears to be capturing less from Google. StatCounter reports that Bing holds a mere 4 percent of the global share across all platforms, in contrast to Google’s nearly 90 percent. This suggests that Microsoft’s strategies to encourage continued use of Bing and Edge on Windows are proving more effective in desktop use than on mobile devices.
While Microsoft’s search and advertising division remains small compared to Google, it has undeniably prompted a response from Google, now incorporating new AI features and a dedicated AI mode in its search platform. Bing’s gradual growth signifies a successful realization of Microsoft’s objectives. Ribas remarked, “This marks the fourth consecutive year in which Bing and Edge have increased their market shares.” Furthermore, the growing popularity of Bing stems from its role in powering web grounding for leading third-party chatbots like ChatGPT and Meta AI.
Recently, Microsoft has shifted the majority of its AI initiatives toward Copilot, stepping back from a primary focus on Bing search. This transition occurred shortly after Bing’s AI-enhanced Chat feature garnered 100 million active users just weeks post-launch. Following this, Microsoft rebranded Bing Chat to Copilot to enhance its competitive edge against ChatGPT and other standalone AI chat solutions.
