Microsoft (MSFT) search engine Bing could gain if Google leaves Australia

Microsoft Corporation (MSFT) positions Bing as the Internet search engine of choice in Australia if Alphabet Inc. (GOOG, GOOGL) carries out a threat to make Google unavailable in this country. The bone of contention is a proposed law that would force Google and Facebook, Inc. (FB), among others, to pay for content these tech giants copy from Australian news sites.

Australian Prime Minister Scott Morrison says he’s spoken to Microsoft CEO Satya Nadella to find out if Bing can fill the void. “I can tell you that Microsoft is quite confident” that Australians would do just as well with Bing, Morrison told the National Press Club of Australia. Microsoft has not commented yet. Google has a 95% market share in Australia, while Bing is a distant second at 3.7%.

  • Google has threatened to leave Australia if a law is passed requiring news organizations to pay for the use of their content.
  • A binding arbitration clause is the main sticking point for Google.
  • If Google leaves, Microsoft’s Bing could fill the void.
  • This would be an opportunity to raise Bing’s profile as a viable alternative to Google search.

Binding arbitration is a sticking point

Google is under similar pressure elsewhere in the world to pay for news content. In December 2020, for example, Google reached an agreement with French newspaper publishers that lays the groundwork for individual licensing agreements, with payments tied to factors such as the amounts published daily and the traffic they attract. The sticking point for Google in the Australian bill is that it would establish a binding arbitration process to determine what an online platform should pay a given news organization, if the two parties fail to reach a settlement. agree on their own. 

What Google earns in Australia

In 2019 and in Australian dollars, Google Australia had revenue of $4.8 billion, of which $4.3 billion came from advertising, and recorded a profit of $134 million. Converted to US dollars, these figures were $3.7 billion, $3.3 billion and $103 million respectively.

Could Bing fill the void?

In 2018, a writer for the tech-oriented website Wired ran a three-month test in which he stopped using Google Search, using Bing instead. In general, he concluded, “if you want to find something online, Bing will almost certainly do the job.” 

On the other hand, Google offers a number of other widely used services besides its search engine. These include Gmail, Google Maps and YouTube, and it’s unclear what impact Google’s exit from Australia would have on services such as these, which many consumers in that country, as elsewhere, have deemed essential. .

Importance for investors

If Google does leave Australia, Microsoft’s big opportunity with Bing wouldn’t be so much the additional revenue and profit it can earn there, but the chance to boost Bing’s profile around the world as a solid alternative to Google. Meanwhile, the stakes for Google in Australia are far greater than the possibility of its profits slipping.

“The broader concern is whether Google wants a modern Western democracy to show how using its competitors can be perfectly viable,” observes the BBC. Chief among these competitors is Bing.