MI Metrics: Web Search Example

1
MI Metrics Web Search Example

• Q4 2008 Q2 2009

2
Background
3
Northern Light overview

• Headquartered in Cambridge, Massachusetts
• 55 employees
• Founded in 1996 and purchased by employees in
  2003
• Senior management 13 years with the company
• Profitable and cash flow positive
• Compound growth rate of 38 2004 2008
• Up 30 for the first six months of 2009 over
  2008
• Northern Light has a single business provide
  strategic research portals, content, and research
  services to the worlds leading organizations

4
Our current clients include many of the leading
technology companies in the world

• Largest computer equipment manufacturer
• Largest IT technology services provider
• Largest IT security software company
• Largest mobile phone manufacturer
• Second largest global pharmaceutical company
• Largest pharmaceutical company providing
  medications used to treat psychiatric and mental
  health-related conditions
• Largest office supply superstore chain
• Largest package delivery company
• Largest disk drive manufacturer
• Leading property and casualty insurer
• Largest CAD/CAM solutions provider
• Largest telephone system operator
• Largest market research company

5
Background

• This is examination of Web search engine coverage
  and commentary from IT Analysts (e.g., Forrester,
  Gartner, IDC etc.) in the news for the time
  period covering the last quarter of 2008 and
  first two quarters of 2009
• Each of the main players in the market (Google,
  Microsoft, and Yahoo) are examined
• Northern Light performed the examination using
• Northern Light Business News 25,000 news stories
  per day from 8,000 sources, including 2,500
  Industry Authority Blogs
• MI Analyst, Northern Lights proprietary text
  analytics and sentiment scoring engine
• Researchers on Northern Lights staff

6
Background (continued)

• In an actual client assignment, as opposed to
  this sample version, Northern Light could provide
  an analysis of commentary in IT analyst reports
  (from firms like Gartner, Forrester, IDC )in
  addition to commentary of IT analysts in the news
• IT analyst reports are important influencers in
  technology markets
• Roughly half of analyst commentary on companies
  occurs in analyst reports and half in news
• Need both sets analyzed for a comprehensive
  picture
• Also, this example limits the analysis to news
  commentary influenced by IT analysts, but in an
  actual client assignment this or any other
  limitation would be a client option
• Lastly, in an actual client example any research
  source can be included at the clients option
• For example, market research reports, industry
  conference proceedings, Web social media, other
  licensed news feeds, etc.

7
Deliverables

• MI Metrics deliverables consists of four major
  items
• Point of View Northern Lights summary of the
  business significance of the coverage and the
  commentary
• Metrics quantitative analysis of the press
  coverage or research given each competitor
  (commentary, share of voice, sentiment, and
  trends)
• Identification of publishers, journalists,
  analysts, and authors who are providing positive
  and negative commentary
• Quotes comprehensive excerpts from the
  commentary supporting the major themes

8
Point of View
9
Point of View - Metrics

• Microsoft's release of its new Web search engine,
  Bing, in Q2 09 was the salient event that
  happened over this time period
• The release of Bing increased press reports of
  IT analyst commentary about the category
  significantly
• Amazingly, the release of Bing increased the
  positive IT analyst commentary of Google
• This could not have been the outcome that
  Microsoft was hoping for when it took the Bing
  story on the road with a press tour
• IT analyst press commentary of Microsofts Web
  search engine did increase as a result of Bing
  and the net sentiment expressed by IT analysts
  swung from negative to slightly positive

10
Point of View Metrics (continued)

• Meanwhile Yahoo appeared caught in the crossfire
  as
• IT analyst press commentary for its Web search
  efforts did not increase in volume like its
  competitors
• Yahoo IT analyst commentary reversed a trend
  toward a positive tone, with sentiment
  nose-diving into negative territory (once again)

11
Point of View Business Issues

• Bing may shake up the market
• Bing is trying to change the search paradigm by
  offering more value to users on the search result
  than Google does
• Microsoft has a lot riding on Bing in its long
  struggle to catch Google
• Even so, Bing will not give Microsoft the top
  spot it covets in Web search by any means
• Success in overtaking Google in market share is
  viewed as a long-shot by IT analysts
• And Yahoo will take the hit from Bing, not Google
• Google may have to refocus on Web search, leaving
  behind its attack in other areas where it
  competes with Microsoft
• All of this fighting of market share is in a Web
  search market ad market that is suffering from
  the current recession

12
Point of View Business Issues (continued)

• Mobile search is the market where Microsoft has
  the best chance against Google
• In mobile search, the battle continues
• Success in the mobile search market is seen as
  imperative for both Microsoft and Google by IT
  analysts
• Look for Microsoft to leverage its position with
  the Windows Mobile operating system it has won
  some important deals
• Look for Google to leverage its Android platform
  to gain default status with carriers but it is
  behind Microsoft so far

13
Coverage Metrics For Analyst
Commentary In Press Media ArticlesOn the Web
Search Market
14
Press commentary by IT analysts Q408 - Q2 09
IT analyst commentary in the press mentioned
Google and Yahoo about an equal number of times,
but with very different expressed sentiment
toward the different companies. Microsoft had
less overall commentary and also a less favorable
reception to its story than Google received.
15
Coverage and sentiment by IT analyst group
Forrester and IDC provided the most
sentiment-loaded press commentary about the Web
search competitors, and it was largely positive.
Frost Sullivan and Gartner leaned toward the
negative.
16
Share of Voice for press commentary by IT
analysts Q408 - Q2 09
Google only narrowly grabbed the highest Share of
Voice from Yahoo when the three quarters are
examined together. This is surprising
considering that Google holds 65 of Web search
market share. Overall, IT analysts are very
interested in the Yahoo story. As we will see
later, Bing increases IT analyst interest in Bing
significantly.
17
Net Positive commentary by IT analysts in press
coverage Q408 - Q2 09
Google
Microsoft
Yahoo!
Net Positives are calculated by subtracting
negative IT analyst mentions from positive
mentions. Google was the only of the three to
obtain a net positive sentiment score over all
the IT analyst commentary in the press over three
quarters. Microsoft was the most negative.
18
Net Positive commentary by competitor
Q4 08
Q2 09
Q1 09
Microsoft and Google rise together. The release
of Bing actually increased the amount of positive
IT analyst commentary in the press for Google!
Google maintains its dominant position in
positive share of mind as far as analysts
commentary in the news. Meanwhile, Yahoo falls
alone - back into negative territory.
19
Coverage and sentiment toward Microsoft
The release of Bing generated much commentary for
Microsoft in Q2 09 unfortunately for
Microsoft, it was largely neutral. IT analysts
just didnt buy into Microsofts hoped-for spin.
20
Coverage and sentiment toward Yahoo
Microsofts Bing introduction resulted in more
commentary of Yahoo, but the spin on Bing knocked
the wind out of the positive momentum Yahoo had
begun to enjoy in the tone of press commentary.
21
Coverage and sentiment toward Google
Googles commentary and positive commentary soar
as a result of the introduction of Microsofts
Bing.
22
Individual analyst sentiment toward Microsoft
(for client follow-up)
23
Individual analyst sentiment toward Yahoo (for
client follow-up)
24
Individual analyst sentiment toward Google (for
client follow-up)
25
Analyst Commentary In the News Quotes
26
Analyst quotes and commentary

• Bing is seen as hoping to change the search
  paradigm
• Microsoft's Bing will change the face of search
  . . . Bing focuses on delivering answers, not Web
  pages.
• Shar VanBoskirk, Forrester Research
• IOL Technology, May 29, 2009
• They've highlighted some key areas where they're
  going above the concept of 10 blue links.
• Allen Weiner, Gartner
• silicon.com, May 29, 2009
• A distant third place in the search engine game,
  Microsoft hopes that this engine will help it
  gain more searcher share by delivering results
  and content more relevant to how users actually
  search.
• Shar VanBoskirk, Forrester Research
• Forrester Blog, May 28, 2009

27
MI Metrics for Analyst commentary in the News
Analyst Quotes And commentary

• While Bing is not revolutionary, it represents
  serious improvements for Microsoft and puts it on
  par with rivals
• Gartner Group analyst Allen Weiner agreed that
  Bing isn't presenting a radical new way to search
  the Web. I don't see anything that you can say,
  wow, I can't do this on Google or Yahoo, he said
  . . . However, what Bing does provide Microsoft
  is a way to catch up to what competitors have now
  in terms of features . . . It's a marked
  improvement from Live Search . . . They've done
  a lot to make the interface more usable, to make
  it cleaner-looking -- a lot with the algorithms
  to make the search results on par with their
  competitors for most searches.
• Allen Weiner, Gartner Group
• PC World, May 28, 2009

28
Analyst quotes and commentary

• Microsoft has a lot riding on this step and must
  pull it off
• Microsoft has really trailed miserably the
  Google success in the search space . . . They
  really need to come up with something
  extraordinary to change the momentum. And they're
  making a big attempt with this release to change
  the field. They're taking on changing people's
  expectations about what using search should be --
  the experience of using search.
• Hadley Reynolds, IDC
• Tech World, May 29, 2009
• Kumo Bings pre-release codename is
  Microsoft's last chance to get search right as
  it cannot afford to launch another product that
  fails to engage with internet users. If Kumo is
  going to be a success it needs to become a verb.
  For example 'I Kumoed you', I'm not sure that
  will happen.
• Mike Davis, Ovum
• Telegraph, May 20, 2009

29
Analyst quotes and commentary

• Clearly Microsoft has to differentiate itself.
  Looking to overtake Google is brave, even Yahoo!
  will prove a challenge. People are so used to
  Google, shifting them will be hard . . . Bing
  will live or die on how clever it is, and how it
  learns what consumers want. It is creating a
  brand from scratch so marketing will be crucial.
• Rebecca Jennings, Forrester Research
• The Independent, May 29, 2009
• . . . the new tool is part of Microsoft's
  long-term plan to move beyond its stronghold in
  the PC operating system business and capture a
  more significant Web presence. They need this
  for their future growth, . . . With everyone
  moving toward a lightweight, mobile Internet,
  people don't need a PC or a big operating system.
  It's a big change. Microsoft doesn't need to
  unseat Google but they do need to get a Web
  presence.
• Jim McGregor, In-Stat
• PC World, May 28, 2009

30
Analyst quotes and commentary

• Bing no guarantees, present or future
• . . . can Bing get people to switch? That's more
  of a long-odds proposition.
• Andrew Frank, Gartner
• eWeek, June 10, 2009
• They will be competitors against Google and
  Yahoo, but all that does is get them caught up .
  . . Let's say Bing puts Microsoft on an equal
  footing with Google and Yahoo considering the
  fact that players will continue to innovate how
  quickly can Microsoft add more cool bells and
  whistles so it not only stays competitive but
  finds a way to inch ahead and come up with some
  element it can use to further (itself) in the
  market?
• Allen Weiner, Gartner
• CIO Today, May 28, 2009

31
Analyst quotes and commentary

• Bing is seen as a threat to Yahoo, not Google
• However, because Bing is similar to Yahoo in its
  approach to search, it makes sense that it would
  take share away from Yahoo before it would
  Google's search engine . . .Bing is a greater
  threat to Yahoo than to Google because Yahoo has
  been sort of the content search engine and Google
  has been the utility search engine . . . In
  other words, Yahoo has taken more of a concierge
  approach to search, organizing its search
  results more based on what information other
  users have found useful in the past and based on
  services that can be offered around a search
  result . . . This gives Yahoo's results more of
  the feel of a traditional Web portal than merely
  providing people with a list of relevant
  searches. Google, on the other hand, is more of a
  toolbar . . . With Google's utilitarian
  approach and Bing and Yahoo being the more
  portal-based approach, it's easier to think why
  they would be more competitive.
• Shar VanBoskirk, Forrester Research
• The Industry Standard, June 5, 2009

32
Analyst quotes and commentary

• Google is top dog in search
• "It's really the branding that drives people to
  Google . . . They're the Kleenex of search.
• Karsten Weide, IDC
• CNN, May 6, 2009
• IDC survey data shows that searching is the
  number one online activity for U.S. consumers and
  consumers convey the most trust and affinity for
  Google above all other online Internet brands.
• Caroline Dangson, IDC
• PC World, February 2, 2009
• From a search perspective, Microsoft needs Yahoo
  and Yahoo needs Microsoft if they are to create a
  credible alternative to Google.
• Neil MacDonald, Gartner
• PC Advisor, January 16, 2009

33
Analyst quotes and commentary

• Though the threat in search may be greater for
  Yahoo, Bing could prove to be a distraction for
  Google
• If Microsoft invests in improving Web search,
  then Google must respond with similar investment
  . . . That means Google doesn't have as much to
  invest in competing in things where Microsoft is
  ahead.
• Whit Andrews, Gartner
• Knight Ridder/Tribune Business News, June 8, 2009
• . . . Bing has to convince people that there's
  something wrong with their current search
  experience thats the theme of their Overload
  campaign . . . So far as it sows the seeds of
  discontent, that could create an opportunity, and
  makes it imperative for Google CEO Schmidt to
  continue on his promise that Google will continue
  to improve.
• Andrew Frank, Gartner
• eWeek, June 10, 2009

34
Analyst quotes and commentary

• There is a battle looming for the mobile space
• When you look at where its growth opportunities
  are, the next billion Internet users are much
  more likely to use a mobile phone to access the
  Internet, not a PC.
• Charles Golvin, Forrester
• CRM Buyer, November 25, 2008
• When I've worked with Microsoft, they are a
  very, very competitive organization . . . They
  are very aggressive. When you get on the list of
  being a competitor, you never get off. Google is
  coming after Microsoft in the mobile arena, and
  Microsoft is up for the challenge.
• Bill Hughes, In-Stat
• Search Mobile Computing

35
Analyst quotes and commentary

• In the battle to be the default search for
  carriers Google looks to leverage its Android
  platform while Microsoft throws its money (and
  weight) at the challenge both are viable
  options
• The presence of new Android phones will give
  Google a better negotiating position with the
  carriers.
• Charles Golvin, Forrester Research
• CRM Buyer, November 25, 2008
• Im sure Microsoft is giving these companies
  good deals to get carriage but that's not
  necessarily a bad thing . . . People will use
  what's on the screen to do the searches so thats
  important for Microsoft even if they do wind up
  overpaying a little.
• David Card, Forrester Research
• Arizona Republic, January 7, 2009

36
Analyst quotes and commentary

• Declining ad revenues will be challenging Google
  (and all the players) for the near future
• U.S. online ad revenue may shrink this year by
  six percent compared to 2008. Googles growth in
  search ads cannot offset drops in display and
  classified ads.
• Karsten Weide, IDC
• BNET, April 22, 2009

37
Contact information

• Priscilla Seuss, Vice President of Sales
• priscilla_at_northernlight.com
• 617-794-8095
• Address
• Northern Light
• 10 Canal Park
• Cambridge MA 02141