Last week Microsoft announced the launch of the mobile version of its new flagship search engine: Bing Mobile, which is nowhere close to Bing’s PC/web-based version, needs a lot of work to live up to expectations, and does not pose a threat to Google at this point.

1. Bing mobile, a watered down version of Microsoft’s new search engine and work-in-progress version of Live Search Mobile. While many experts were impressed by Microsoft’s new search engine “Bing,” featuring slick 3D maps, an appealing travel search engine, quick restaurant reviews and other key features, Bing mobile still needs a lot of work to get anywhere close to its PC/Web-based version. While Bing Mobile’s shopping (Digital SLR), local search, news search and visual image page features, allowing users to click the numbered zones to view the corresponding section of that web page, live up to expectations, Bling mobile’s maps look more like a collection of clipart images at this point, and its travel and health search engine need some more work in terms of search results and relevancy. Granted, Bing mobile’s user experience through touchscreen smartphones like the iPhone or the Palm Pre is probably better than the one provided on most feature phones. However, the penetration of smartphones remains fairly small today, which is a key restraining factor for Microsoft. While new versions of the application will be released soon, it is fair to say that Bing mobile is just the updated version of Live Search Mobile at this point.
   
   
2. Google set to remain out in front. While Google’s solution does not seem to be specifically tailored to the mobile requirement as it does not optimize the user experience by resizing and reformatting the mobile web pages and mobile ads, Google is set to remain the leader in the mobile search engine space based on its leadership in the branded mobile search space, its successful business model (based on AdSense), strong brand, the breadth of its search catalogue, and strong relationships with carriers and OEMs. Although Microsoft plans to enhance Bing mobile in the coming months through the release of new versions, Microsoft is unlikely to catch up with Google. Quite frankly, Microsoft’s Bing mobile is currently not a threat for Google as it is today.
   
   
3. Competition from other players likely to remain fierce in coming months. Competition from other enhanced search engine (JumTap, Yahoo, Medio Systems) and new entrants (Mozilla), will also make it difficult for Microsoft to gain share in the coming months. That said, we would point out that Microsoft has gained a bit of momentum, especially in the U.S., where Verizon Wireless, one of Medio Systems’ key customers, recently selected Microsoft’s one-stop integrated to provide search and display advertising on Verizon’s Mobile Web service. Clearly, this was a key win for the giant software company, and we should expect to see other major wins for Microsoft in the coming months.

Bottom line: Clearly, Microsoft is trying to create awareness around its new mobile search engine. In fact, Microsoft launched on June 3rd a large mobile marketing campaign for Bing Mobile including full-day homepage takeovers on the mobile properties of media giants like The New York Times, CNN, AP News, and CBS News. Additionally, the campaign will use rich-media formats such as iPhone expandable units, rotating ads and searchable banners. In our opinion, Microsoft should have waited a bit longer and made significant improvements to its mobile search engine before releasing it. Why rushing it when you have the resources and time to do it? What users get today is simply a watered down version of Bing, which is a clear disappointment. However, we should give credit to Microsoft for trying to make a comeback in the mobile search engine space. Also, its new PC-based search engine has already received excellent reviews and is set to become a success. Ultimately, improving Bing mobile’s mapping feature, and travel and search engine capabilities, while adding new features will become critical to making Bing mobile a state-of-the art mobile search engine capable of competing with Google and other key players.