Yahoo Finance’s Dan Howley joins the Live show to discuss Microsoft’s push to innovate search through the AI-powered search engine Bing, and what it's like to use the AI-powered search engine.

Video Transcript

[AUDIO LOGO]

JULIE HYMAN: Search engine second fiddle Bing is mounting a comeback. Microsoft's push to innovate search with AI is now threatening, maybe, to usurp Google's decade-long dominance with its conversational search model. Yahoo Finance's tech editor Dan Howley has the latest. We don't Bing it, we Google it.

DAN HOWLEY: Yeah, so that's the big problem, right? Googling is synonymous with search. You Google something. You Goog something. Pull it up on the Googs, right? That's something that is out there.

JULIE HYMAN: [LAUGHS] As the kids say.

BRIAN SOZZI: Is it?

DAN HOWLEY: Yeah, yeah, I mean, look, it's out there in the circles I hang out in, which are degenerates. But So let's just start off with what Bing is and Bing's history, right, because it's kind of muddled at this point. So Bing actually kicked off, believe it or not, in 2009. It was the replacement for Microsoft's Live Search. And you see here, it originally was MSN Search.

That was back with-- what was it-- MSNBC when Microsoft was part of that. Then we had Microsoft Live Search, just Live Search, Bing, Bing, Bing, Microsoft Bing, and now we have Bing with a regular B. And so at the time when Bing was announced, it was actually pretty innovative. It had a related search panel, something that Google has now.

It would pull up frequently searched for items. So if you went to look for a hotel, it would pull up the hotel's phone number in the search, something that we see now in Google. It also did things like it would preview articles when you mouse over them. So it was a big deal.

But at that point, Google was already just entrenched. It's like a tick. You can't get it out, 91% market share at that point globally. And by the way, it was on the new crop of phones that was popping up run by Google, Android.

So what is Bing doing now? So what they have now is still an incredibly small market share, 92.9% for Google, 3% for Bing. By the way, that's the second best search engine out there. Yahoo exists somewhere along that continuum down the line. But we also have the idea that, well, OK, so Google runs all of this. Google makes the vast majority of its wealth off of ads from search.

So what does that mean for Microsoft as far as making money? Well, according to CFO Amy Hood, if Microsoft is able to claw back just 1% of market share, that's worth $2 billion in revenue annually. So they're under no kind of idea that they're going to pull back huge amounts of market share. They're saying, look, if we can go 1%, 2%, we're going to make bank on this. And it'll be worth our investment in the long run.

What's more, Microsoft has been growing their search and news advertising revenue. Ex-tax, it's 24% two-year compound annual growth rate. And the industry itself is at a three-year compound annual growth rate of 18%. So Microsoft's beating out the overall industry.

So I think what you look at when you see something like this with Bing with this AI capability is that they're fully reinventing their search engine and, as a result, what consumers will expect from search engines, right? And one of the examples that I have-- I published a piece yesterday. Is, look, I have a 2007 Ford Mustang, right? Very cool when I bought it, still very cool, by the way. The only people that have ever complimented me on it, old men.

BRIAN SOZZI: I did too. So what, I'm old?

DAN HOWLEY: I mean, hey, I appreciate it. I appreciate it. But so if-- I like big TVs, right? I want a 65-inch TV. So I looked up-- I have an LG C1, very specific type of TV, awesome. If you want one, go buy it. And this older Mustang--

So I was like, OK, when I was going to buy this TV, I was like, well, is it going to fit in my Mustang? So I figured, OK, this is a few years ago. Let me look up to see if this AI can tell me this without me having to go through links and-- what's the dimensions of the Mustang's trunk? What are the dimensions of this LG? What happens if I pull out the seats?

I entered in, can an LG C1 fit in the trunk of a 2007 Ford Mustang? And I'm not kidding, it pulled up exactly the answer, the dimensions of my trunk, the dimensions of the TV. And then it said, if you're buying a 48-inch, it might fit, but you might have to remove the trunk cover as well as some seats. That's not recommended.

They said you can try putting it in the back seat and buckling it up. Make sure that you don't damage the screen. If it's anything more than 48 inches, it's not happening. And that's the kind of search that this is going to enable. So you're not going to have to go through all these different links.

Here's an issue, though, with that, which affects us as journalists and other content creators as well is you're getting all of those answers. Those answers come from individual websites. You're not going to those individual websites now, right? So it's going to hurt the revenue for content creators, for journalism.

Microsoft says, look, we're linking to those sites. Fair enough, but if I have my answer right there, then why am I going to go to those sites? So I think that's really where one of the issues lies for Bing. But it is an incredible technology.

BRIAN SOZZI: Yeah, when you were out in Microsoft's headquarters, that vibe-- what was the vibe there on Bing and artificial intelligence? Did you get a sense that there are true believers that they can really claw that 1% market share away from Google? Or is this just a lot of hype?

DAN HOWLEY: Well, I think when I walked in, I think a lot of people were like, OK, ChatGPT, really interesting. But the people don't really use Bing. I use Microsoft's Edge browser on my PC at home. Chrome is just-- I mean, it's basically like carrying around like a sack of molasses with you when you're on the internet. It slows everything down.

I think with Edge, it's a much better form of Chrome. Bing though, you don't-- like we were saying, we don't Bing things. Once people started using this though, they got really, really interested in it because of how impressive it is.

And from what I've seen from Google's Bard so far, it doesn't offer the same kind of conversational chat, at least what we've seen from Bard as of yet. Bing is doing something that's completely different and really, truly amazing. Here's the issue. I was talking to "Futurum" analyst Dan Newman. And basically he said, we've seen incredibly disruptive technologies from ARM and AMD. And Intel still sits at 75%-plus of the server market. So just because there's a disruptive, impressive technology doesn't mean they're going to pull it away.

Here's two other issues for Microsoft and Bing. One is Android, it's the most used operating system in the world as far as mobile goes and, I think, generally. What comes installed on the vast majority of those Android phones? Chrome. Chrome runs Google. Also if you have an iPhone, the default search is Google. So Google is everywhere. And it's still like that tick that you can't pull out.

JULIE HYMAN: [LAUGHS]

BRIAN SOZZI: Well put, Dan.

DAN HOWLEY: Get Some tweezers, I guess. Olive oil helps. I don't know.

JULIE HYMAN: Hopefully. I won't take the line.

[LAUGHTER]

I was going to just say something about Lyme disease. But then that analogy only goes so far. Thank you so much, Dan. Appreciate it.