ChatGPT Opened a New Era in Search. Microsoft Could Ruin It

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Ecosia, which uses Bing results and invests its profits in environmental projectsis considering potential partners to develop its own chatbot. Its leaders would be eager to license Bing’s chatbot technology if Microsoft was willing to share. “It’s important to ensure that this isn’t another tool for these companies to further entrench dominance,” says CEO Christian Kroll.

The small search player escapes Bing’s price increases because it is a syndication partner of Bing, meaning it repackages both ads and search results from Microsoft and gets a split of ad sales. However, Kroll says the multi-fold fee jump for Bing API customers is an “urgent red flag” signaling a market with great power imbalances that The European Commission should regulate under the Digital Markets Acta law enacted last year to ensure Small companies can compete with Big Tech on equal terms. The EC did not respond to a request for comment.

Bing serves less than 3 percent of searches worldwide, analytics service StatCounter estimates, far behind Google, which takes 93 percent. But Bing’s share is over 8 percent on desktop computers, where Windows is the dominant operating system and Microsoft gives its own search engine preference.

Search ads on Bing search results are a key portion of Microsoft’s $18 billion in annual advertising revenue. Every 1 percentage point of market share increase could translate into $2 billion of additional ad sales, Microsoft finance executive Philippe Ockenden told it analysts hats last month craving .Microsoft does not break out Bing API sales.

The chatbot race has stoked excitement for the first time in years about competition between Bing, Google, and everyone else around. You.com’s Socher says users until the past few months recoiled from features not familiar to them. “People would be like, ‘I’m just so used to Google. I don’t want it to be too different,’” he says. Now users seem open to new experiences. “It’s just a different, new world,” he says.

Sivakumar, who’s building the shopping search service Tonita, says Microsoft might have more success with its chatbot if it opened it up for other companies to license on reasonable terms, winning wider usage and turning more consumers away from Google. Microsoft’s handling of its existing APIs does not instill optimism. He decided against using Bing APIs because their long-standing terms of service do not let customers modify, store, or process search resultslimiting the data’s potential application.

The same technology enabling Microsoft’s search renaissance is also making it easier for companies to imagine doing without Bing. After building search startup Neeva On Bing’s API, CEO Sridhar Ramaswamy says user bug reports about misinterpreted queries, outdated results, and other quality issues convinced him to shift course in late 2019.

Neeva drew on its $80 million in funding to develop its own system to serve results, though it still relies on Bing for image and video searches. The startup benefited from hiring top ex-Googlers, cheaper memory for servers, and the advent of LLMs that made it easier for software to understand misspellings and synonyms, despite having limited user data to analyze. Ramaswamy says the project has “more than paid for itself,” enabling the launch of the startup’s quick-answer tool Neeva AI in January.

Bing is still not easy to oust. Like Google, Microsoft has a wide ecosystem of products and services that can help direct people to its search box. Some users have complained that Windows resets Bing as the default search engine from their preferred alternative. (Microsoft says it’s committed to users being in control.) Microsoft also requires using its browser or mobile app to give the Bing chatbot a try, fueling a surge in downloads. Says Ramaswamy, “If we enter into a world in which there are only two large players with the infrastructure and expertise in search, it is clear that they are not going to be welcoming of competition.”

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