Microsoft/Yahoo: Far from Serious Google Threat

As the tech world awaits an announcement from Yahoo and Microsoft on their web search and advertising partnership, I’m wondering how such a partnership can achieve its end goal — to loosen Google’s stranglehold on the highly lucrative Internet search market.

Reports from the Wall Street Journal, WSJ’s All Things Digital blog, and Reuters Tuesday said that under the impending agreement (which could be announced Wednesday), Microsoft will provide the search technology for Yahoo web sites. This will presumably put Microsoft’s newly-packaged Bing search engine in front of millions of erstwhile Yahoo search engine users. It’s not yet clear if Microsoft’s search engine will be branded as Bing on the Yahoo sites.

Microsoft technology will also be used to pair the appropriate ads with the search results. Yahoo will continue to manage the sales and support of the search ads on its own sites and possibly on some of Microsoft’s sites, the reports said.

The two companies reportedly will share the profits from search ad sales at Yahoo and Microsoft web properties. Previous iterations of a Microsoft/Yahoo deal had Microsoft taking over both the Yahoo search and search advertising businesses. So the reported deal will give a nice boost to Bing’s user base.

Meanwhile, Yahoo would get to focus on its core strengths–advertising and content. Great, but how is this deal going to put Microsoft and Yahoo in a position to make a serious run at Google? How will Bing win over substantial numbers of existing and potential Google search users?

I’m not seeing it (and neither does blogger Ian Paul). People often use the search engine that seems familiar to them. For most people today, that’s Google. Google has done a lot to integrate search with its other applications, making it even harder for users to defect. I’m ready to believe that Bing is a better search engine than Yahoo’s search engine; most of the Yahoo faithful will be pleased with it.

I’m impressed at some of the innovations the Microsoft engineers have brought to search with Bing, an area of innovation Google has dominated for years. For instance, Bing introduced a left-side panel, called the Explorer Pane, that allows you to quickly choose from among a number of different angles on your search. Bing lets you preview videos in the search results by simply mousing over them, and Bing’s method of parsing through image search results is far superior to Google’s.

But, in the grand scheme of things, these are incremental improvements, not game-changing innovations. As for larger-scale improvements, I’ve seen no evidence that Bing’s algorithm searches the deeper, darker corners of the web any more thoroughly than Google’s, or for that matter, Yahoo’s. As for the much-hyped “Semantic Search,” that technology will indeed drive search’s evolution, but over the long term, and it will definitely not be the sole domain of one search engine or other.

If Microsoft and/or Yahoo ever make a serious run at Google in the search business, it will take place over years, not months or quarters. Microsoft will get a quick boost in market share from the addition of Yahoo’s search traffic, but after Yahoo, what other substantial search player is left to partner with or acquire? None that I can think of.

Let’s look at the numbers to get an idea of what Microsoft and Yahoo are up against. Comscore says Google controls 67 per cent of the search market worldwide, compared with Yahoo’s eight per cent and Microsoft’s three per cent. Looking at the US market alone, Google controls 65 per cent, compared with Yahoo’s 20 per cent and Microsoft’s eight per cent.

That’s a wide deficit to make up, against a very strong, and deeply entrenched competitor. Microsoft–a software company at heart–may someday get itself into the same league with Google in the search business, but it’s going to take a lot of time, money and radical innovation to get there. Its long-awaited partnership with Yahoo may be just the starting gate.

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Jim Love, Chief Content Officer, IT World Canada

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