Source: A Battle Is Brewing Between Two Big Shot Microsoft Executives (MSFT)
A source close to Microsoft told us there's a showdown of sorts between two powerful executives in Satya Nadella's administration: Terry Myerson, the man in charge of Windows (including Windows 10) and Qi Lu, the man in charge of most of Microsoft's consumer online services, including Bing and MSN, Microsoft's news portal.
The fight is about who gets to control the default home page of Internet Explorer and the enormous amount of attention that page commands. And it all started with a recent redesign to MSN.
Some 400 million new Windows PCs are sold each year, all with Internet Explorer installed. Often, MSN is set as the default home page. Lots of people never change that.Compete.com says that MSN gets about 81 million visitors a month.
Until September, when you clicked on a headline on the MSN page, it often didn't take you to the news story. It conducted a Bing search on the headline instead. This was driving considerable traffic to Bing, our source says, helping Bing rank as the nation's second largest search engine to Google, with about 20% marketshare, according to comScore.
But in September, Lu's team rolled out anupdated version of MSN. One of the changes was to curate more actual news stories from big-name news sites. So clicking on the headline took you to an actual story, not a Bing search.
Our source says that the redesign hurt traffic, telling us that "page views and revenue dropped by as much as 60% in some countries." Bing was particularly hurt. (Microsoft refutes this, saying the new MSN was a hit and pointing to monthly comScore statistics that show no drop in market share or searches on Bing.)
Apparently Qi Lu was worried, our source said, and held daily meetings to find ways to get MSN to boost Bing search again. So the team quickly found ways to add Bing searches back to that MSN home page, which you can see in the screenshots below.
Here's the photo of the new MSN from September via a blog post by Brian MacDonald, vice president in charge of MSN.
Here's what MSN looks like today, featuring more Bing searches up top.
But the momentary lapse has opened an old fight: All the department heads lust after the default home page on Internet Explorer. They want it to point to their own offerings, not just MSN.
Our source tells us this is shaping up to a three-way fight: Derrick Connell, who runs Bing, wants IE to simply default to Bing.com. He's apparently pitching that a Bing.com default page could also showcase other key Microsoft online businesses.
If that happened, it would hurt MSN.
MSN boss MacDonald is naturally lobbying to keep IE pointing to MSN.
And, our source says, Terry Myerson, the guy in charge in Windows, wants it to default to something that plays up Windows 10. If that happens, that could potentially hurt both MSN and Bing.
People inside Microsoft are watching the fight to see which way the power is flowing at Microsoft, we're told. Myerson's power is rising, and IE has long been part of the Windows group, so he would seemingly have a lot of influence. Moreover, Microsoft seems to be deemphasizing the advertising business, which how MSN makes money — last month, it fired most of its global advertising sales team.
Lu, on the other hand, is known as a peacemaker. So Lu's teams are watching to see if he'll fight for them to keep all the traffic flowing to Bing or MSN, or if he'll bend to Myerson with some sort of compromise.
A Microsoft spokesperson tells us that Bing and MSN are doing well, and that the new MSN is a success, according to the comScore data. Here's the statement:
"As the most recent market share data indicates, Bing and MSN both continue to grow. We are seeing a great response to the new MSN, which we just rebuilt to combine content from the world’s leading media outlets along with easy access to tools such as Office Online, Skype and Bing. Similarly, we’re pleased to see Bing gaining traction both as a standalone search engine and as the intelligence platform powering experiences inside and outside of Microsoft, including Cortana on Windows Phone, Siri and Spotlight from Apple."