I disagree that this is the main reason why MS is behind Google on search.
I think the main problem of MS is that it is copying Google search and not providing anything substantially different or better. In other words, fighting against incumbent is not about spending more money than incumbent and doing the same. It is providing service for "niches" where incumbent is not willing or not able to provide service.
Here is an example:
Google shuts down Google Code search. I'm not happy. But, I was thinking... There is Bing... They will maybe jump in and provide state of art code search. But... nothing happen.
I think the main problem of MS is that it is copying Google search and not providing anything substantially different or better. In other words, fighting against incumbent is not about spending more money than incumbent and doing the same. It is providing service for "niches" where incumbent is not willing or not able to provide service.
Here is an example:
Google shuts down Google Code search. I'm not happy. But, I was thinking... There is Bing... They will maybe jump in and provide state of art code search. But... nothing happen.