Traditionally, when people thought about Google they thought about “Search”. Google do this well, but as we know, Microsoft have been trying to get stuck into this market as well with their latest product. ” Bing ” ,of course trying to compete with a company that has over 85% of the market is no mean feat.
So Microsoft and Yahoo have decided to tag team and join forces against the “Big G”. Last week the US and European Regulators finally gave the all clear in the partnership between Microsoft and Yahoo. Under the new deal, Microsoft will get to power Yahoo’s search results, while Yahoo will supply the ads. Both companies are hoping that this 10 year deal is what’s required to give Google a run for their money.
I’m sure the US and EU regulators had no problem letting the pair team up against Google, because Google are just so far ahead at this stage of the game. Google really are running away with this search business and it would be next to impossible for just one company to try and take them down. Allowing Microsoft and Yahoo to join forces should spur “greater competitive pressures in the marketplace,” the Justice Department predicted in a statement.
But what does this deal mean for us users?
Well to put it in a nutshell, not alot. You will still be able to go to Bing.com and Yahoo.com and perform a search, however you will just get the exact same results as Bing will be powering the search on both sites. The ads will then be supplied by Yahoo for both Yahoo search and Bing. This won’t really affect users, but where it will matter is with advertisers.
Those who just advertised with Yahoo before, will now have a larger audience viewing their ads, Bing searchers and Yahoo searchers. But it could be a while before we see this new search implemented. The duo hope to have the US versions of their sites up and running with the new partnership by the end of this year, and are aiming for 2012 to have the whole world sorted.
But the real winners out of this deal are Yahoo. First off they get $150 million from Microsoft to help offset its expenses for the transition to a new technology. Then after that, they get 88% of the revenue from search ads on its Web site during the first five years, while Microsoft absorbs most of the expenses. Yahoo who have seen better days, estimate they could see profits increase by as much as $500 million a year.
So what are Microsoft really hoping for here? Well it’s all about market share, while it may cost Microsoft a lot financially in the short term, they have the money to spend, they’re really looking at the long term. They are taking a big gamble, but once Bing and Yahoo merge, they will have a combined search engine market share of approx 10%. While this seems pitiful compared to Google, it does give them a solid platform to build on and really have a go at Google.
What do you guys think? Will this new partnership of “Microhoo” be enough to make an impact on Google?
Let us know in the comments
