Earlier this week, as part of the US Department of Justice’s antitrust case against Google, Microsoft’s CEO, Satya Nadella went to Washington, DC, to testify in support of the theory that Google used unfair practices to establish dominance over the search engine market — including against Bing, The Wall Street Journal reported. “You get up in the morning, you brush your teeth, and you search on Google,” Nadella told the Justice Department. “With that level of habit forming, the only way to change is by changing defaults.”
The result for Microsoft, Nadella said, is a “vicious cycle” — and Bing can’t keep up. The CEO even expressed doubts as to whether Microsoft’s AI capabilities could help Bing finally beat Google, a theory he suggested to The Verge earlier this year.
“The distribution advantage Google has today doesn’t go away,” Nadella said in Washington, according to the Journal. “In fact, if anything, I worry a lot that—even in spite of my enthusiasm that there is a new angle with AI— this vicious cycle that I’m trapped in could even become even more vicious because the defaults get reinforced.”
In October 2020, the DOJ filed a lawsuit against Google over accusations that the company used “anticompetitive and exclusionary practices” to dominate online search. The trial began last month and is ongoing.
Google Took it Easy
Google didn’t immediately respond to Insider’s request for comment ahead of publication. Microsoft declined to comment.
Even Google was scared for its own search business. In December, CEO Sundar Pichai redirected several teams at Google to work on its own AI products, and the day before Microsoft announced the revamped Bing, Google unveiled its own AI chatbot, Bard.
Microsoft CEO Testifies on AI, Google Search
What about Bing?
The Microsoft CEO’s comments came after the company bet big on AI. In January, Microsoft announced a $10 billion investment into OpenAI, the company behind ChatGPT. A month later, Microsoft released a beta version of its new AI-powered Bing search engine — it was released to everyone in May — which the company said could generate an additional $2 billion in ad revenue.
But Bing has struggled to chip away at Google’s share of the search market. As of September, Bing was found to only have a 3.03% slice of the online search pie, compared to Google’s 91.56%, according to data from market research firm Statcounter.
As Daniel Tunkelang, a search consultant who previously worked with Google, told the Journal in August: the revamped Bing is “cute, but not a game changer.” On Monday, Microsoft CEO Satya Nadella showed up at the Google antitrust trial to back the Department of Justice’s argument that “Google used unfair tactics”—most significantly, default search contracts—to block opportunities for search competitors like Bing, The Wall Street Journal reported.
