Internet advertising declines slightly

In a recessionary environment that has hit many media sectors with great force, Internet advertising revenues in the US were at $5.5 billion for the first quarter of 2009, according to the numbers released today by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC). The figure represents a five percent decline over the same period in 2008.

“Interactive advertising has taken its rightful place as a fixture on marketing plans across sectors, which means we aren’t immune to broader economic trends,” said Randall Rothenberg, President and CEO of the IAB. “Nevertheless, consumers are spending more and more time with interactive media. For this, and other reasons, interactive media continues to gain share of marketing spend. We’re confident that growth will resume as the US economic climate improves.”

Bing strong in early days

Microsoft has joined the trend to enable search to do more. Last week it launched its new “Decision Engine” called Bing (www.bing.com). Designed to build on the benefits of today’s search engines, Bing aims to move beyond the simple search experience with a new approach to user experience and intuitive tools to help consumers make better decisions. Bing will initially focus on four key vertical areas: making a purchase decision, planning a trip, researching a health condition or finding a local business.

According to Microsoft, as a Decision Engine, Bing is designed to empower people to gain insight and knowledge from the Web, helping them move more rapidly to finalizing important decisions. With the explosive growth of online content, Bing was developed as a tool to allow people to better navigate through the information overload that has come to characterize many of today’s search experiences. Results from a custom comScore Inc. study across core search engines found that as many as 30 percent of searches are abandoned without a satisfactory result. The data also showed that approximately two-thirds of the remaining searches required a refinement or re-query on the search results page.

“Today, search engines do a decent job of helping people navigate the Web and find information, but they don’t do a very good job of enabling people to use the information they find,” said Steve Ballmer, Microsoft CEO. “Bing is an important first step forward in our long-term effort to deliver innovations in search that enable people to find information quickly and use the information they’ve found to accomplish tasks and make smart decisions.”

Bing helps identify relevant search results through features such as Best Match, where the best answer is surfaced and called out; Deep Links, allowing more insight into what resources a particular site has to offer; and Preview, a hover-over window that expands over a search result caption to provide a better sense of the related site’s relevancy.

Early results show that consumers are responding positively to Microsoft’s offering, although Microsoft dominance of search is perhaps a distant dream. Bing overtook Yahoo! as the number two search engine in the United States and worldwide Thursday according to data from StatCounter Global Stats. StatCounter noted that Bing grabbed market share from Google. “It remains to be seen if Bing falls away after the initial novelty and promotion but at first sight it looks like Microsoft is on to a winner,” commented Aodhan Cullen, CEO, StatCounter. “Steve Ballmer is quoted as saying that he wanted Microsoft to become the second biggest search engine within five years. Following the breakdown in talks to acquire Yahoo! at a cost of $40 billion it looks as if he may have just achieved that with Bing much sooner and a lot cheaper than anticipated.”

StatCounter data globally finds that Bing at 5.62 percent has taken a narrow lead over Yahoo! (5.13 percent). Google worldwide retains 87.62 percent of the market.

Shift in software pricing

An IDC survey of IT and line of business (LOB) professionals in the United States shows that more than 60 percent of respondents believe that now is a good time to negotiate steep discounts for traditional on-premise software.

“In this economy, traditional licensing approaches are under fire, with steep license discounts and maintenance concessions the norm,” said Amy Konary, program director, Software Pricing, Licensing, and Delivery. “In order to survive the downturn and position for growth in an eventual recovery, software companies will have to evolve their go-to-market approach, and subscription pricing and Software as a Service (SaaS) will play a key role.”

This IDC survey also showed that organizations are highly interested in software pricing options that help shift spending from capital budgets to operating budgets. There is also a new trend in considering software purchases from small firms with very short track records, if the price is good and functionality seems at least comparable.