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Microsoft's Mehdi on Yahoo, Bing Cashback, and more

In an interview, Microsoft Senior Vice President Yusuf Mehdi talks about Bing's journey so far and the long road still ahead.

Microsoft used Hollywood as a backdrop on Tuesday to launch new entertainment features for Bing. Ina Fried/CNET

WEST HOLLYWOOD, Calif.--Although the focus of Bing's latest update is on entertainment, Microsoft insists it is more substance than fluff.

"Entertainment has turned out to be a very high-volume, high-query scenario," Microsoft Senior Vice President Yusuf Mehdi said in an interview with CNET on Tuesday. "About 10 percent of all queries are entertainment-related, so that's a big opportunity."

As part of the seasonal update, Bing is adding the ability to play tens of thousands of full-length TV episodes, more than 100 games, and more than 5 million full-length songs from directly within the search engine.

Microsoft's Yusuf Mehdi presided over the Hollywood event marking the launch of a slew of new entertainment features for Bing. Ina Fried/CNET

In the interview, Mehdi talked about the new features as well as the ongoing integration with Yahoo and other search industry topics.

Q: Why the focus on entertainment?
Yusuf Mehdi: Entertainment has turned out to be a very high-volume, high query scenario. About 10 percent of all queries are entertainment-related, so that's a big opportunity. We saw a lot of problems in terms of how consumers were searching for things and not finding them. Then, frankly, we thought it was an opportunity to be able to differentiate, because of our bet on visual and complete experiences. I think we've spent more time in the industry. We've run a music service for a long time. I was working on music 10 years ago.

There are a lot of people that can provide "hey, here's a link to this, here's a link to that." The people who can do the end-to-end killer experience, make it simple, make it easy, have it work. That's what can help you transcend. I think we saw an opportunity to maybe do that.

One of the new features is the ability for users to play full-length songs once without buying them. Is your sense that you will be the only one with this single, full-play right or do you expect others to get this right?
Mehdi: I don't know. It took a lot of partnership with the record labels. They could maybe do it with someone else. I don't know how it will play out in other places.

Where are things at in terms of the integration with Yahoo?
Mehdi: Doing the algorithmic work will be more straightforward. The advertising migration is certainly a much harder challenge. We're making great progress right now. We have these two integration teams, one on the Yahoo side, one on the Microsoft side that are working every single day and meet regularly. Right now we are on track to get it all launched before the end of this year. We're crossing our fingers. Obviously if we don't think we are ready and we want to take a little more time we will (push it out) so we don't disrupt the holiday period. For now things are looking really good.

We saw Yahoo and, to a lesser extent, you guys get a bump by putting search queries in some new places--not where a user typed it into a search box. It strikes me that not all queries are the same. How do you think that will shake out?
Mehdi: We're all about trying to deliver for users the information they want the way they want it. We have experimented with doing some things like providing some slideshows of photos when people search or query for things. It turns out people love those and that's why they click. We don't try to go overboard on that.

I think we are very focused on good organic growth of the classic search business. Year-over-year we have grown four points overall. So that's been pretty solid. As we go forward, how do you measure those things. I personally look to the measurement bodies (like ComScore) to sort of decide how they want to categorize and measure.

Are there any new distribution deals we should know about, or are more kicking in?
Mehdi: Things continue to ramp, but nothing new to announce at the moment. One of the nice things about the momentum we now have in the first year is a lot of people want to come work with us. We launched with Opera. Recently, we became an option in Apple. Other distribution providers have wanted to talk with us about going with them as well, so I would say watch this space.

Do you guys spend a lot of time thinking about location on the desktop. Obviously that is a huge component of mobile search. Do you think the day is not far off where all results will take into account their understanding of where the user is?
Mehdi: I completely think so. The search engine we run and others run is completely geo-tagged. You know where this link is and that event is. I think that's a likely scenario in the future.

On the shopping front, you guys recently pulled back on Bing Cashback. Clearly, that's a very high-value category for advertisers and search engines. You guys hinted in an e-mail to customers that you have another plan. What do you need to do?
Mehdi: Our commitment to do some fantastic and maybe even disruptive things in the area of search remains. Cashback was one of those big bets. As we've discussed, it didn't work out exactly the way we had hoped. We have a couple of other ideas that are in the works now that we are talking about, nothing imminent.

You can tell me.
Mehdi: It's still early.

End of the summer?
Mehdi: We may start to beta test some things by the end of the summer.