Google has confessed to being wary of Microsoft in the search market, with CEO Eric Schmidt calling the software giant 'well-funded, smart and clever'.
Bing is still battling for market share in search, with Google the most dominant provider in the western world.
Speaking at a round-table at Google Zeitgeist, Eric Schmidt insisted that Google was not resting on its laurels and that it was well aware of the 'extraordinarily well-funded' rivalry from Microsoft.
"We have a strong competitor in Microsoft in our search base and Microsoft is competing globally in every market on search," said Schmidt.
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"I think it's very important to remember we have a competitor and they are extraordinarily well funded…they have a lot more cash on their balance sheet than we do.
"The clear answer to your question is our primary competitor has been, is and I suspect will be, Microsoft – They're well funded, they're smart, they're clever."
Current stats from StatCounter suggest that Google has a 90 per cent share of the search market, with Yahoo (4.3%) still second and Bing holding steady at around 3.6 per cent.
Although these statistics are not replicated perfectly across other measurement companies, the dominance of Google is beyond doubt.
However, a well-publicised tie up with Yahoo in the US will mean that Bing powers 30 per cent of national searches, compared to Google's 65 per cent.