The problem with trying to compete with Google in search is that search isn't broken: Most users find what they're looking for quickly and have no idea whether one search engine is any more "relevant" than another.

Also, search is seriously habit-based.  If you hear about some cool new whizzy search engine, you might try it once or twice (Ask, Wolfram Alpha, Bing).  But once you discover that the results are pretty much the same as you would get using Google, you'll quickly go back to your old habit of using Google again.

Thus, to actually persuade you to switch search engines, a new entrant doesn't just have to be better than Google.  It has to be much better--so much better that it is immediately obvious to you that you're getting more from the new search engine than you would be getting from Google.

Microsoft's first iteration of Bing wasn't "much better" than Google.  It was just another search engine, albeit with some nice layout and a $100 million ad campaign attached.

But now Microsoft has gone and included the Twitter streams of a few digerati in the search engine, including Kara Swisher, Danny Sullivan, and John Battelle.  And it has announced plans to include a lot more. 

Now, first, you have to hand it to Microsoft for choosing these folks to include, because they have big bullhorns and they'll chatter about it all day long.

Second, you finally have an opportunity to say, WELL DONE, MICROSOFT! 

Twitter/real-time search isn't something that the average Internet user wants right now, but it will be someday.  And when the average Internet user wants it, search engines that don't have it will feel as fresh and relevant as, well, newspapers.

So as soon as you get through mentally patting Microsoft on the back for this move, you think NOW WHY ON EARTH ISN'T GOOGLE DOING THAT?  And then you wonder whether Google has just gotten big, fat, and lazy and whether Microsoft really might have a chance in this search business after all.

The other reason we have been arguing that Bing will bomb is that we think Google will be able to rapidly copy any true innovations that Microsoft comes up with and add them to Google before the vast majority of users even know that Microsoft has launched them.  We still think that.  And now we'll have an opportunity to test this theory in the real world.

So when will Google Search include relevant Twitter and Facebook updates?  The clock is officially ticking...

See Also:
It's Time For Microsoft To Face Reality About Search And The Internet
Ballmer Is Making A Bad $10 Billion Bet