Google outsmarts Bing, but Facebook still remains a potential rival

While Microsoft's Bing struggles to equal Google in terms of search ads, Facebook is slowly catching up in the race.

A report on search advertising in the first quarter of 2011 by Efficient Frontier, an online advertising analysis and consulting firm, shows that Google is still far ahead of Bing in the amount of money it gets from search advertisers. Efficient Frontier also reported that the company didn't break the Facebook numbers though there was 40 percent cost per click growth in the marketplace. EF also said there was a 300 percent increase in ad inventory. There is an increasing trend in spending on ads in Facebook. But Facebook belongs to a separate category.

Another upcoming trend in the US is paid searches on mobiles. Banking and investment firm Macquarie Group reported that almost 5 percent of paid search spending in the US is now in mobile sphere. EF reports that 97 percent of mobile search spend (for Efficient Frontier clients) went to Google, while 3.2 percent spend was credited to Bing/Yahoo.

But again there has been an announcement by Microsoft that Apple will be hosting Bing as a new application on iPad. This will lead to a drop in the market share of Google because Apple has a significant share on Google's mobile search.

In another recent report, EF said advertisers get 37 percent more impressions on Facebook for 6 percent of their Google budgets. The competition is difficult to analyze, the report says, while pondering the fact that facebook ads tend to lack Google's call to action.

For the quarter, Google gained slightly, with 79.1 percent of all paid search marketing spend, versus 20.9 percent for Bing .That was up from 78.7 percent and 21.3 percent, respectively, in the fourth quarter of 2010.

Bing has done considerably well in Finance and Retail but not in Travel. Google had purchased airtravel information business ITA software recently, which is bound to bother Bing. Outside US, Google is still dominant except in Japan where Yahoo is very close to Google's share.

In future, Bing can be a threat for Google. Its advantage in terms of social media and social network is best explained by Qi Lu, president of online services division of Microsoft. He says, Google has web graph and doesn't have social graph; Facebook has social graph but no web graph... We are proud that we have both in Bing and want to use this opportunity to keep ahead in the market.