Wednesday, July 29, 2009
Should Google Worry about a Microsoft-Yahoo Deal?
After months of awkward courtship, Microsoft and Yahoo have finally agreed on an Internet-search partnership.
By Will Knight
It's been a rocky road, but Microsoft and Yahoo have finally come to terms
on an Internet-search partnership. The 10-year deal will help stabilize Yahoo
while giving Microsoft a better chance of building a successful Web advertising
business to rival that of its newest nemesis, Google.
Under the terms of the deal, Yahoo will use Microsoft's revamped search
engine Bing on all its
websites. Yahoo will also license its own search technology to Microsoft, to
incorporate in Microsoft products if it chooses. In return, Yahoo will handle
advertising for both companies and will receive a whopping 88 percent of search
revenue over the first five years.
Once combined, Microsoft and Yahoo will have a 28 percent share of the
search market. This only slightly narrows the gap with Google, which still
dominates with two-thirds of the market. But the deal will help Microsoft gain
ground on Google in other ways.
In the short term, Microsoft will instantly grab a much bigger audience for
Bing. This will attract more Web advertising and should help the company's
engineers further refine the search engine's underlying technology.
Over the longer term, it's an important strategic maneuver for Microsoft as
a business. As more and more key
pieces of software move online, as well as the operating
system itself, Microsoft is faced with a steady erosion of its traditional
sources of revenue--licenses from companies and individuals. So it's vital for
the company's future to build a lucrative business on the same foundation as
Google.
What it all means for Yahoo is much less clear. The company will obviously
gain short-term financial stability, but it risks becoming less relevant as an Internet
business.
Most worrying for Google, perhaps, is the fact that recently Bing has been
getting very positive reviews. Not only that, but a recent study from online
advertising company Chitika
claimed that Bing users are 55 percent more likely than Google users to click on
advertisements after reaching a site. If that's true, it could help lure more Web
advertisers away from Google and over to Bing.
Massachusetts Institute of Technology
Comments
The juxtaposition of sentences is interesting, in that, it could be perceived as linked. What are the positive reviews about ? The search engine as such or the ad system for its choice depending on the user's query ? Because in both cases (not that I advocate google), the results of the study are more about the users than the system. Because it makes sense that people most eager to use bing would be prone to be influenced by advertising.
lzbk
07/29/2009
Posts:1
Definitely no positive reviews from me. When Bing first was rolled out I tried it for a few comparative Bing vs Google searches and went right back to Google. I was thinking "how many person-weeks did MS spend on this - 3, or maybe 4? What minimalist garbage. Useless.
Maybe it has gotten better in the last few weeks. But I think the reported early adopters are the folks not websearch-savvy enough to hit the "cancel" button.
gvo1000
07/30/2009
Posts:5