March 2011

This article was written by Jay Bhatti and published on Business Insider – Click here to view.


My last article regarding Bing’s partnership with Kayak resulted in several emails asking who Bing might partner with next.  It’s an interesting question and one that merits thoughtful consideration.

Let’s go back a few years, when Bing was officially launched. On May 28, 2009, Microsoft launched Bing and Steve Ballmer declared it the decision engine. In the press release, Microsoft specifically called out Travel, Shopping, Local and Health as verticals where they wanted to simplify the task for consumers.

When placed in this context, Bing wants to help you make a decision (a purchase decision), and not just browse through multiple links like Google.  Given Bing’s recent deal with Kayak, it looks like Bing’s new strategy may be to partner with best of breed third party vertical search engines that give consumers more choices, better curtailed results, and revenue for Microsoft.

In this context, the Kayak deal makes sense. Microsoft focuses on price predictor, while giving consumers a greater diversity of travel options via Kayak. One of the key reasons Microsoft quoted working with Kayak is the ability for Kayak to search more places than available on Bing, hence providing more answers to Bing users.

Microsoft seems to have realized that its internal efforts are best focused on core search improvements, improving user experience, and monetization. It has therefore chosen to stop or at least defer work in vertical search experiences and instead establish business and technical integrations with leading edge companies in these verticals.

Given Google’s ITA acquisition, Bing probably had to do a deal in the travel vertical soon.  So, the travel vertical is covered for Bing via the Kayak partnership. What about shopping, local, and health?


Paris Hilton Shopping Shopper ConsumerShopping

Shopping is bigger online than travel, and growing faster online, which makes me assume that it’s a key focus for Microsoft now.

In shopping, Bing started off by applying considerable technical and marketing effort behind Microsoft Cashback, including acquiring a startup, JellyFish. However, this effort proved costly and did not drive the user loyalty Microsoft had been hoping for and ultimately it was shut down during the summer of 2010.

At the same time, all through 2009 and 2010, Google has been relentlessly pulling ahead in the shopping vertical. Google’s efforts now include a very comprehensive product index of several hundred million product offers though an expanded merchant center receiving data feeds from hundreds of thousands of retailers. In contrast Bing shopping has just a few thousand retailers (100 times less) submitting data feeds and only tens of millions (10 to 20 times less) of product offers.

To see how serious Google is about the shopping vertical. Take a look at their recent activity.

1 – They buy for visual search
2 – Google Shopper App rolled out on the iPhone and Android
3 –  Integration deals with PowerReviews and BazaarVoice to get data feeds for aggregating product reviews from merchant web sites
4 –  Organic web search results now show product images and prices through product feeds submitted to Google Product Search merchant center.
5 –  Google launches  Focused on apparel/fashion market with visual search and soft goods shopping search technology acquired from and run by team from

To say that Google is serious about shopping is an understatement!

To top it off, they just recently bought UK startup BeatThatQuote (a price comparison site), to increase their international shopping footprint.

It’s fair to assume that Bing will have to do something in shopping soon.  But what?

To keep from falling out of the race entirely, Microsoft should quickly extend its vertical business relationships to include shopping to keep up or even pull ahead of Google…
With Microsoft’s equity/search relationship with Facebook and integration of Facebook social graph in Bing’s search results, finding a shopping search partner that can leverage this would be significant differentiation vs. Google.

A company called offers the most comprehensive shopping index rivaling and maybe even exceeding Google Product Search, with over 450 million product offers from over 500,000 stores.
In addition, TheFind has developed a sophisticated integration with Facebook using Facebook Connect and the open graph. TheFind includes local shopping capability that is really useful on the Web and even more useful for fast growing smart phone using offline shoppers. TheFind also shows matching coupons, and free shipping offers by pulling in data from all of the leading coupon sites over the Web like Retail Me Not, and others.

Similar to how Bing wants to use Kayak in order to show more options to users, can do the same for Bing on the shopping side – finding every product Bing shoppers may be looking for and from all of the stores that sell them, along with deals and coupons, and showing you the local places to buy them.

Besides, I always like  However, eBay recently bought the company and I wish Microsoft would have gotten into that deal.  Their product is compelling and unique and would have been a nice addition to Bing.  However, there are other shopping companies that Microsoft can still look at for a deal. For example:

PowerReviews – provides consumer reviews (Google has already done a deal with them)
Polyvore – helps pull together user content around fashion (great way to deal with BOUTIQUES from Google)
Twenga – International, especially for fast growing economies like Brazil and Eastern Europe. This could offset Google’s international shopping ambitions.

Yipit foundersWhat about Local?

Again, Google has been doing a lot of work in Local.  From trying to buy YelpGroupon, and then deciding to launch their own version of Groupon, and doing more work on aggregating reviews from Yelp and other review sites.

The obvious company that comes to mind here is a Yelp. However, I don’t see that much value for Microsoft doing a deal with Yelp. Will it really help consumers make the right decision?  If Yelp was exclusive on Bing, I would prefer Google for local since I know they have combined reviews from multiple review sites. Furthermore, Yelp is not a cash cow like Groupon.  There is not much in terms of financial gain for Microsoft in this play.  From the Kayak deal, Microsoft not only wants a better experience for consumers, but also a partner that can bring significant revenue for Microsoft.

At the same time. I would not do a deal with Groupon or any other deal site – that’s not search.  Instead, I think a partnership with a company like Yipit or another deal aggregator makes more sense.

What would be better than being able to go to Bing to final all the local deals in your area from dozens of deal sites and deciding which one you want. Now, that’s a decision engine.

Yipit is the clear leader in this space today.  They have a broad reach of partnerships with deal sites, and have done the best job of creating a slick UI.   Yipit is still young, so I would not be surprised if Microsoft decided to buy Yipit and quickly integrate it into their local search product.  It’s a smart acquisition that could give Bing a nice shot in the arm. Not only would it create a valuable user experience for Bing users, but the economics of Yipit (they get paid every time a sale is made on the deal site) make it possible for Microsoft to have revenue coming in day one from such a deal.


Health is a tough one to say the least. It feels like people have been trying one thing or another on the web in health since 1996, and with no serious traction.

However, I recently came across a vertical search in health that actually made sense!  Take a look at when you get a chance.  If you’re ever in a position to have to find a new doctor, dentist or other medical provider, you know how stressful the process can be. First you have to know if they are covered by your plan. Then, how do you know if they are any good?  ZocDoc covers both of these pain points.  I went to it last night, found a dentist that was in my network who had the best community reviews on ZocDoc.  I made an appointment right on the site and today I went in for a cleaning!  How easy is that!  And the dentist was as good as billed on the site.  To me, this is a great example of a vertical search engine that solves a problem that lots of consumers have.  ZocDoc gets a referral fee / subscription from every doctor they are able to successfully book an appointment for.  I can see this being a great tool within Bing.

bing microsoft

Image: Associated Press

In conclusion

Microsoft’s deal with Kayak shows three things.

1 – Bing wants to partner with best of breed vertical search engines
2 – Bing wants partners who can increase choice and user experience for consumers
3 – Bing wants partners who can bring revenue to the table (Kayak will probably pay Microsoft a decent penny for every conversion that happens via Bing Travel)

If that is the criteria, I think TheFind, Yipit, and ZocDoc make a lot of sense for Bing to go after next.

Read more:



5 Things The Kayak Deal Tells Us About Bing

by Jay Bhatti on March 7, 2011

This article was written by Jay Bhatti and appeared on – click here to see full version.

On Friday, Microsoft announced apartnership with Kayak to provide travel results. Jay Bhatti is a former Microsoft employee who founded the people-search engine Spock. Here’s what he sees in the deal:

1. Microsoft purchased Farecast a few years ago for more than $100 million. It’s safe to assume that it was another waste of money for Microsoft. The Farecast team combined with Microsoft’s resources could not build a compelling enough product to compete with Kayak. Heck, two years ago, Kayak complained to Microsoft that Bing’s travel product looked identical to Kayak. Looks like $100 million gets you a team that at least knows how to copy and paste.

2. Microsoft is again switching strategies. Less than 2 years ago, Bing was all about internal innovation and buying companies (Farecast, Powerset, etc) that would help it accelerate product development. Now, with this deal, Microsoft is admitting that it’s better for them to outsource innovation to vertical search engines like Kayak, as opposed to trying to build them internally. Not surprising about this change in direction since Satya Nadella has now been promoted at Microsoft to run the Server and Tools Division. In my opinion, it’s a great win for the server division and a huge loss for the Bing group. Satya is one of those executives at Microsoft who “gets it.” He did a good job of trying to unify the search efforts of Microsoft around Bing and then trying to create compelling experiences around Bing. The unfortunate thing is that the culture of Microsoft is all about doing good in your current role so that you can move onto greener pastures in another group within the company. Satya did a good job at the technical side of Bing and was rewarded with the Server and Tools group. If I were Steve Ballmer, I would have kept Satya in that role for a lot longer.

3. Forget vertical. It’s more fun being horizontal. A few years ago, Microsoft thought that they could compete with Google by chipping away one vertical at a time. For example, they bought Farecast to do travel, they did the awful cash back promotion to chip away on shopping search, and then they made a lot of noise in the marketplace about how their maps and pictures were delivering better results then Google.  Now it looks like Microsoft is going to focus again on general search.

4. I use Kayak all the time and respect the product the Kayak team has built. This deal just further demonstrates their product leadership. Kayak will get more revenue, more profit, and more customers via greater distribution through Bing. In the end, this deal will help Kayak make a better showing at their eventual IPO. Given that Microsoft did this deal with Kayak, the new leadership at Bing is probably looking at other vertical search providers to power parts of their search.

5. If I am on the Bing team, this is a demoralizing deal. Management is telling the Bing Travel team that they are not rock stars from Mars, that that they cannot innovate, and that it’s better to use someone else’s technology. The only Bi-Winning happening here is for Kayak and Google. A few friends of mine at Google are quite amused at Microsoft outsourcing this part of their search. Yahoo outsourced search to Bing. Bing then outsources travel search to Kayak. Talk about passing the buck.