It’s probably too early to tell if Microsoft Corporation (NASDAQ:MSFT)’s entrée into the tablet world—with the introduction of its Surface device—is going to make much of a dent in Google Inc (NASDAQ:GOOG)’s seemingly unshakable dominance in the search engine arena. But there has been some reason for renewed optimism among shareholders who have likely grown weary of the lack of progress in unseating search engine giant Google Inc (NASDAQ:GOOG).
Microsoft Corporation (NASDAQ:MSFT)’s Bing search engine grew to 17.4% market share in May, up from 17.3% the month before and a not-insignificant rise above its 15.4% search engine market share for May 2012.
With Microsoft a bit slow on the draw with its tablet, investors are no doubt hoping the old adage “better late than never” will hold true. But if the company’s late start with tablets mirrors its late arrival in the smart phone market, where it has only eked out a 5% share, investors could be left wondering if Microsoft Corporation (NASDAQ:MSFT) has again arrived at the party too late.
As the number of tablet users continues to climb, so does the number of users relying on such devices for search purposes. A recent study presented by comScore, with partners from 15 miles/Geary LSF and Neustar Laceleze, revealed that searches conducted by PC users had dropped 6% year-over-year by December 2012 and there’s little indication this downward trend will slow. Meanwhile, use of tablets to reach search or navigation sites and apps bounced upward by 19% in the period between April through December 2012, according to comScore’s research.
Equally interesting is comScore’s look into the unprecedented pace of new tablet ownership. While it took smartphones nearly a decade following introduction to reach 40 million owners, tablets were able to reach this milestone in a mere two years since the launch of the iPad.
What this means for search engine giants Google, Bing and Yahoo!—as well as the countless companies trying to earn their attention—is that a better experience for tablet users could score market share and higher search ratings, respectively.
Businesses continue to vie for the attention of the big three with coordinated search engine optimization, most often relying on outside expertise to help the process along.The trend in tablets and the continued fight over search market share is gaining international attention, particularly since many of the companies assisting businesses with their optimization needs are working on a global basis.
“We are aware of both trends—greater use of tablets and steady growth of Bing’s market share—and we advise our clients accordingly,” says Daniel Vassiliou, head of Endurance SEO, a search engine optimization, web development and online marketing company based in Irthlingborough, Northamptonshire, U.K.
Vassiliou says optimization of online content is not as straightforward as some might think, and current trends have him counseling clients to consider the experience of the tablet and mobile device user, not just the PC owner. “Unlike a lot of firms, we’ve also tried not to focus wholly on Google Inc (NASDAQ:GOOG) when working to improve optimization of client content. Certainly they are the major force, but it’s important not to ignore a third of what is going on out there.”
Year-over-year growth shows Bing’s percentage of search queries jumped nearly 30% from the previous May, while Google’s share increased by 14% and Yahoo! showed an increase of just 1%. Google Inc (NASDAQ:GOOG) continues to boast over 2/3 of the total market share.
Yahoo’s stagnant showing suggests that Bing may be gaining in market share at the expense of Yahoo!, not Google. Yet, Microsoft doesn’t seem to have a game plan for garnering search market share once it has finished chipping away at Yahoo!.
On the tablet side, recent analysis in Forbes based on data from Frank N. Magid Associates and International Data Corporation, shows that Apple has seven times the market share of Google’s Nexus tablets and nearly 12 times the market share of Microsoft Corporation (NASDAQ:MSFT)’s Surface.
The real issue for investors looking for Bing to become more competitive, then, may be whether or not Microsoft can capitalize on the tremendous trend in tablets, both directly in tablet sales and by targeting its services to provide an exceptional tablet search experience.
So far, soft sales of Surface have not allowed the company to make inroads with its tablet, which is preloaded with Bing. A recently announced fire sale on Surface signals the company is clearing inventory for the next generation of its device, but severe discounts can spark the wrong kind of buzz.
The rub for investors who understand the impact tablets can have may be that while Microsoft Corporation (NASDAQ:MSFT) seems to be doing much internal integration to reinvent itself, there is little concerted effort on tablets or search market share.
Despite losing out to Apple in the tablet arena, Google Inc (NASDAQ:GOOG) appears to have enough tricks up its sleeve to continue to attract tech investors as well as hold onto its search market dominance, an assumption supported by the company soaring past $900 last month, a new high. Microsoft remains at just under $35, despite an impressive climb the past few months. Both have seen growth over the past year, though Microsoft Corporation (NASDAQ:MSFT) has been more volatile.
As Business Insider pointed out in a column last month by Jay Yarow, there seems little that can threaten Google’s continued power and plenty to support a bullish case for Google Inc (NASDAQ:GOOG). Undaunted by Facebook, parent to the wildly popular YouTube, and top of the heap for smart phone operating systems, Google continues to serve up success, despite the occasional stumble, and smart money usually sniffs out innovation.
There seems little to recommend against betting on Google Inc (NASDAQ:GOOG) to continue as the heavy hitter, despite the slow and steady progress of Microsoft.
Lori Weaver has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of Google Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT).
The article Tablet Users Continue to Influence Search Market Share originally appeared on Fool.com.
Lori is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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