Microsoft & Yahoo!: Katie & Peter or Posh & Becks?
- July 31, 2009
- by Richard Gregory
So the will they? Won’t they? Relationship between Microsoft and Yahoo! has dragged on like an Eastenders omnibus. However, the deal has finally been announced this afternoon. The marriage will apparently see Yahoo! sell search ads under Microsoft’s recently rebranded Bing search engine. Suggestions are that there are no initial payments between the two companies but that a complex revenue-share model has been agreed.
So, what does this mean to the search industry?
The most significant impact will be on the US search market. The marriage will create a combined force which will own 40% of the search market. This combination creates a serious Google contender in the US and is certainly going to be more successful than Katie and Peter were in the US, and will possibly reach the Posh and Becks status over there.
However, in the UK the marriage will be more Katie and Peter than Posh and Becks. The share will be a far less significant 8% which will barely challenge Google’s current share 89-90%. The timing is unfortunate in a way because, as oppose to a year ago, Microsoft will now be taking over the market share of a declining player. Had this deal been done a year ago the combined market share would have been around 11-12% of the UK search market.
It’ll almost be most interesting to see the detail of how the deal will tackle the regions outside of the US, UK and France. Microsoft has little coverage outside these areas, so Yahoo! will likely open the door to diversification into these regions, which is where the real damage to Google could be done.
However, in a way it would have made more sense for Microsoft to partner with or acquire Ask or AOL, since these engines currently have search provided by Google. Taking them over would provide the double whammy of reducing Google’s share while growing Microsoft’s. Maybe this is the next step though.
What does it mean to search marketers?
As a client we are looking forward to spending more time (and money) with Microsoft since they have excelled at client service over the past 2 years.
There will also be a benefit of simplified campaign management for search advertisers since there will only be two interfaces to manage. This will also be a benefit to companies with bid management technology for PPC since they will have fewer APIs to integrate with. Although on the spin side they’ll have to make numerous changes to their interfaces to remove Yahoo! as an individual search channel.
Overall I think if you look at this matrimony on a global scale there is definitely potential to reach the status of Posh and Becks particularly in the territories outside of the US, UK and France. However, for the UK market this deal has very little impact and looks set to end up more Katie and Peter.
8 Comments
DIGITAL MARKETING MATTERS
sri
Wow! Finally Microsoft has reached a deal Yahoo for an internet search partnership. Will the newly announced deal between giants Microsoft and Yahoo be a good thing? Got to wait and see. But atleast Microsoft and Yahoo deal is straightforward and not complex at all and ofcourse, the negotiation talks have been going for long. I was just curious to know all the past negotiations between Microsoft and Yahoo so collected all the articles and links (more than 200) related to the current merger and the previous events or negotiations between Microsoft and Yahoo. If you are interested check the link below.
http://markthispage.blogspot.com/2009/07/saga-of-microsoft-and-yahoo-from-2007.html