Microsoft wants its money back: chatbot ads, Bing Search API price hike

The new Bing, despite its flaws recently reported by early users, undoubtedly captured the world’s attention. Microsoft wants to put this fame to good use by allowing paid links to be included in the responses generated in the search results. Apart from that, the giant also announced a price hike in its Bing Search API starting on May 1 in all markets.

The unveiling of the new ChatGPT-powered Bing drew the attention of many. According to Microsoft, there are already millions of individuals on Bing’s waitlist, indicating a bright future for the general availability of the intelligent search engine. With this, it is not a surprise that the software giant wants to monetize Bing by putting ads into its search results, especially in the generated responses of the Bing chatbot. According to Reuters, Microsoft held a meeting with a major ad agency this week and has already started discussing the matter with others.

It is not clear how Microsoft plans to “insert” the ads in the chatbot responses; however, Horizon Media’s executive vice president of performance media, Michael Cohen, told Reuters that the software company pointed out that the cited links included in the AI-generated search responses (placed at the bottom) “could be places for ads.” Cohen further shared that Microsoft could share more details about the ad strategy in early March.

The plan seems to be greatly targeting Bing’s conversational AI chatbot, the search engine’s most sought-after feature. Another ad exec who provided statements to Reuters said that ads are already being tested in the current users of Bing’s early version, which means it is now possible to encounter an ad or two during a casual conversation with the chatbot. Aside from the insertion in responses, Microsoft is also reportedly testing another ad format in the form of pop-up ads.

Both sources of Reuters said Microsoft still hasn’t given a timeline and other details about when interested companies could try the ad service in the chatbot. However, it is clear that Microsoft definitely wants to earn back the money it used on the new Bing as soon as possible.

In a recent announcement, the company said there would be a pricing change in its Bing Search APIs. Bing Search API’s free instance (tier) will remain the same by offering 1,000 transactions free per month for all markets. In other cases, however, the price hike can be overwhelming as the increase can result in a 1,000% hike.

For instance, the S1 instance, which currently costs $7 per 1,000 transactions with a maximum rate of 250 TPS, will soon be $25. In the same instance, the optional Bing Statistics add-in, now at $1 per 1,000 transactions, will soon be $10 per 1,000 transactions. Microsoft explained that “the new pricing model reflects more accurately the technology investments Bing continues to make to improve Search.” 

The recent moves from Microsoft came after the company’s confirmation of its “multibillion dollar investment” in ChatGPT-creator OpenAI. According to Microsoft in its statement, the partnership will allow both companies to “commercialize the resulting advanced AI technologies.” These steps seem to be the start of this profit-driven plan.