Bing Boosted by Microsoft and Yahoo Deal

Contributing Editor

Microsoft-Yahoo partnershipThe on-off relationship between Microsoft and Yahoo has been consummated. A new 10-year deal will bind the two companies as they seek to compete with Google.

In January 2008, Microsoft originally offered $47.5 billion to buy Yahoo outright. Despite Yahoo’s ongoing financial difficulties, the deal was rejected because co-founder and then director Jerry Yang demanded more money.

The latest deal is a revenue-share agreement that involves no money changing hands:

  • Bing will become the search engine used by both Microsoft and Yahoo.
  • Microsoft AdCenter will become the single search advertising platform.
  • Yahoo will focus on media, marketing services, and sales.

Bing usage has been growing at an average of 25% per week. However, this has primarily been at the expense of Yahoo Search and it is yet to dent Google’s market share. The deal will instantly provide Bing with almost 30% of US internet queries and save Yahoo $200 million in search engine technology development costs.

Advertising prospects for the combined systems should also improve. Yahoo and Microsoft both offer effective search advertising platforms, but advertisers often choose Google because it receives significantly more traffic.

However, the link up will not be easy and both companies expect scrutiny from the US Department of Justice. The Google-Yahoo advertising alliance failed in November 2008 partly because of DoJ opposition. Ironically, Microsoft was the biggest and loudest complainer about that deal.

Assuming the legal, technical, and structural details can be overcome, the Microsoft-Yahoo collaboration creates a far more powerful competitor for Google. That will be welcomed throughout the industry, but can the companies work together effectively and beat Google in a market it dominates?

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  • http://www.gvsmedia.com shotaz

    it’ll be brilliant if they teamed up. Google is awesome we all know that but in this day and age a market without competition is boring. Think of the prospects it will have for us as webmasters. Goolge won’t be so laid back and sit there just offering the things it wants to, it would go out and make the market more competitive by introducing better services to out flank its rivals. I for one hope the deal goes through, not to see google loose its grip on the market but to see it improve its current stance and take us one step further, technology wise.

  • http://www.WebTrafficAcademy.org RogueScripts

    So now there will be even less competition in the search marketplace. I hope yahoosoft/microyahoo/binghoo loses, I’ve always had far better experiences with Google, product and business wise.

    I think its a really bad idea to get rid of yahoo search and consolidate into bing search. They should keep developing both yahoo and bing search technologies to give their users two choices and keep their holdings diversified. I bet yahoo is going to lose some of its users to google because of this.

    “…and save Yahoo $200 million in search engine technology development costs”… sure…

  • W2ttsy

    this alliance wont solve any problems. The reason Google are so dominant is because the products work, are easy to use and their business processes are clear and concise. Until Yahoo or Microsoft realise this, their offering (separate or allied) will do little to nothing to take back market share…

    Funnily enough, this is the same position that MS are facing in the browser and OS department. The old tactic of mass market share + shoddy products are gone. Any group of teens in a shed with a fantastic product can topple an empire, which is what Google (taking over Yahoo) and Facebook (taking over myspace) have proven.

  • MauiMan2

    not to see google loose its grip on the market

    The word is “lose.” I don’t know why it’s so hard for people to figure that out.

    And it cracks me up how people like Google just to like Google.

    “The good thing about the Bing/Yahoo alliance is now Google will get even better.”

    “But will you use Bing/Yahoo if it’s better than Google?”

    “No, I’ll keep using Google, because Google is awesome!”

    “Even if there’s a better product?”

    “Yes!! Long live Google.”

    The problem with this scenario is that people don’t realize Google is on its way to becoming Microsoft simply because the public insists on giving it the power to do so. They don’t remember that a long time ago Microsoft was the cool, edgy computer company to be into. Then when the public insisted on buying Microsoft products (such as Word) when there were better alternatives (such as Word Perfect) it helped Microsoft become a big, sprawling bureacracy that everyone complains about now.

    “Oh, but that could never happen with our beloved Google.”

    But it will happen and all those who insist Google is the only Internet-based company worth bothering with are going to help it get there.

  • Anonymous

    Ooop! but I don’t thing so, Google is simple and cleaver! The air of Microsoft is going down! it is time for new thinking!

  • http://www.optimalworks.net/ Craig Buckler

    Although the deal should good for competition, I will be sorry to see the Yahoo search engine go. It’s actually very good and probably as good as Bing. There have been times when I’ve used it as my default search engine (especially when every Google result appeared to return a link farm a few years ago).

    I also hope that this doesn’t spell the end for other Yahoo development projects. They have been producing some excellent web widgets, libraries, and components which are far more advanced than MS’s offerings.

  • http://www.gvsmedia.com shotaz

    The word is “lose.”
    Ok Mr English…. You can just point something out to someone without the attitude.

    Goolge will eventually become a “sprawling bureaucracy” and yes it will happen because we let it. No one has forgotten that MS was the big boss some year ago, but as you’ve said, WAS, technology has taken huge strides because of the way power changes hands. In order to beat MS they either had to start producing crap products or someone creates a better one. Yahoo’s search is and always was great but the fact is, it was always a bit too complicated and at one point or another goolge started producing more reliable results, if even for a while, it was long enough to win a lot of people over. Technology changed hands with yahoo and google. Google started producing better results because they did something better than yahoo did, no denying that, how else did they come from behind to get where they are. Myspace will probably be remembered as the social network that caused all the hype, but very few people know or even remember friendster (or whatever their name was that was before myspace). Even though myspace was simple compared to what we have today, it was reliable and offered something better, again power changed hands because one made improvements on the other. Myspace had its run, facebook came into town with a slick easy to use RIA, making extensive use of the latest tech, and grasping on the ajax concept quickly, once more power has changed hands.

    No one is saying google is perfect, i’m saying its not time for power to change hands yet. Microsoft and Yahoo need to find something that will give them the advantage over google. MSN is still one of the largest brands known on the internet, i bet most people don’t even know what MSN stands for. People never completely abandon one product for the next, they usually just take the best of both. Until MS or Yahoo does something to make them shine out on top i’ll be using google all day everyday.

    “Yes!! Long live Google, hoot hoot”

    Oh by the way it is “bureaucracy” not “bureacracy”, google it…

  • Billa Coetsee

    The writings on the wall for Yahoo! Every single company that made such an in-depth pact with Microsoft has been screwed over. Just read the book “Pirates of sillicon valley” or watch the movie “Fire in the valley”. This looks similar to the deal Microsoft had with Novell many years ago… Some people joke to this day that Microsoft NT is actually Microsoft (Novell Technology).

    But given the histories of Google and Microsoft… I’ll side with Google at any and every opportunity.

  • rayan_es

    Nice thing …..

    The latest deal is a revenue-share agreement that involves no money changing hands:

    * Bing will become the search engine used by both Microsoft and Yahoo.
    * Microsoft AdCenter will become the single search advertising platform.
    * Yahoo will focus on media, marketing services, and sales.

    But I don’t think it will be affective. coz google is now too much big. Even for MS+Yahoo. There is another thing i personally don’t like about MS & Yahoo. They have some weakness for the USA, UK & AU web publisher. What about us? R we out of the world. This is the reason i don’t like them. what ever earning facility or publisher advantage they r giving all for usa, uk & Au publisher. MS & Yahoo if want to fight with GOOGLE 1st they should loss the USA centered mentality.

    To fight with a world class search engine like GOOGLE, bing & yahoo also must be world class not usa base. If they don’t change this mentality i don’t think it will work.

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  • TommiChi

    @MauiMan2:
    Totally on point, I love you man. It is good to see that there are still people out there who are focused on what’s best for the “game”, rather than just who their favourite player is.

    If Microsoft come up with better products and services (and we should all give them a chance to show this without prejudice), we will all be better as Google feels the flames of hell licking their cheeks. The quicker people realise this, the more players other the Google and Microsoft will also have a chance to sneak up ninja style and join the foray

  • Valerie Shipbaugh

    Competition is good for Google!

  • http://www.WeightJournals.com marcel

    10 years seems way too long.

  • dangerous

    competition is good but not the jealous.
    Both yahoo & microsoft should try to improve their product
    instead of fighting to compete with google.
    They cant win over google unless they make a new change.
    Sorry Mr.Gates

  • MauiMan2

    The word is “lose.”
    Ok Mr English…. You can just point something out to someone without the
    attitude.

    You must be being facetious because merely saying “The word is ‘lose’” shows no attitude. I overlook millions of typos on the ‘net but point this one out from time to time since it is so overwhelmingly common.

  • MauiMan2

    The air of Microsoft is going down!

    I’m guessing you mean “era.” Be prepared for the air/era of Google to go down eventually too. You might be surprised to learn that I use Google services quite often (blogger tool, search [though not exclusively], gmail as a backup e-mail, etc.). I’m not saying not to use them at all. What I am saying is that problems will arise when people insist on using Google stuff exclusively no matter what (and people already do and are proud of it – and I have even seen numerous instances where somebody has outright said, “I don’t care if another company made something better. I’m sticking with Google!”). Not sure why that’s hard for people to see but it’s hard to pierce through the cult-like fascination people have with Google. It’s like they’ve turned people into a bunch of Gollums who have nothing on their mind except their precious Google.

  • http://www.spokewords.com royalty066

    I’m loving this “Cyber War”. Like most, I happen to be a major fan of Google so it’s going to take a lot to impress me. I google my name and I show up everywhere with out submiting any URLs. I use Yahoo or Bing searches and maybe one hit will show up from my high school team years ago.

    I’m all for this search engine/OS competition as long as it doesn’t charter into other categories like browsers. Lord know we don’t need another web browser from Microsoft.

  • Tim

    I don’t think that the perception / position of Google will ever morph into that of Microsoft (i.e. unassailable monopoly that people love to hate). I don’t think Google or its products are perfect, but you need to remember that Google’s core products have always been free to use. A lot of people overlook that fact when comparing Google and Microsoft.

  • zuneone

    That has to be the stupidest mistake ever made in business when Yang turned down the $47.5 billion. Micsosoft didn’t even want Yahoo, they just wanted the Yahoo search business – which they ended up getting anyway. All at no upfront cost.

    I prefer Bing myself especially since my domains position themselves near the top of the search results. :)

  • StevenHu

    “Bing usage has been growing at an average of 25% per week.” So it reached 100% in four weeks? This is a terrible use of percentages. It means nothing in this context.

  • RockingOut

    Google needs the competition!!

  • MauiMan2

    For one of my blogs Yahoo has consistently been better about ranking its entries properly (and high, I might add) than Google. Some of Google’s algorithms are about the best a computer can get w/o being human, but it is by no means perfect.

  • http://www.optimalworks.net/ Craig Buckler

    @StevenHu
    According to Hitwise, Bing searches accounted for 3.43% of all US searches on 6 June 2009. That rose to 6.63% by 27 June 2009, with an average increase of 25% per week (on it’s own figures). But Bing is new, so exponential growth at the start is not unusual.

  • Sephere

    Google will not sit back by putting hand over hand and see how they will be overtaken by the MS-Yahoo. They can do what their competitors can do, and a popularity gap will always remain there.

    Well, criticism & competition is necessary to make the things better.

  • StevenHu

    @Craig

    OK, that makes sense. Thanks!

  • sitehatchery

    The word is “lose.”

    Well, actually the word is “loosen”, as in “loosen it’s grip”. But c’mon. Who even cares?

  • sitehatchery

    I mean loosen its grip (without the apostrophe)

  • MauiMan2

    Well, actually the word is “loosen”, as in “loosen it’s grip”. But c’mon. Who even cares?

    In this case they could’ve meant “lose” or “loosen” but shotaz put “loose” which is for some reason the way everyone thinks “lose” is spelled nowadays. If they meant to say “loosen” and just didn’t strike the last key it is no big deal. If they meant to say “lose” but put “loose” then, yes, I tend to correct that because I just don’t get why people think “lose” is spelled “loose.” It’s becoming an institutionalized misspelling.

  • http://www.cssispoetry.com BlakeAnthony

    Ohh fer sure! Google, has to be literally pissed off. Beleive that there watching there numbers drop real quick. (Myspace) now (Google) lmao!

  • flashmind

    The publicity they will get from this deal will also be quite noticeable. Anytime Bing is mentioned Microsoft jumps for joy. I am quite happy with Bing, and as Shotaz best put it, “..a market without competition is boring” I couldn’t agree more. It is nice for a change, and it is about time for Google to shape up and get back to their own ground roots. The search engine. It feel like google is trying to become the next Microsoft, by dominating an entire market base.

    This should be an interesting battle in then next few years (at least depending if the government approves this possible merger).

  • MauiMan2

    It feel like google is trying to become the next Microsoft, by dominating an entire market base.

    Finally somebody else sees what I have been saying. This is going to become even more so when they release their OS. BTW, just about everything Google has ever done has been a copy of some other company’s already existing service with maybe a few slight improvements; then the public gives Google the credit for inventing it in the first place.

  • http://www.jasonbatten.com NetNerd85

    HAS ANYONE noticed that Google is full of websites that have no content? They have empty place holder type pages, the worst industry hit by this is the gaming industry. But it is happening to the web industry due to blogs copying content or just linking to the same thing. Google is becoming less and less useful to find information in my opinion, I have to dig deep to find stuff again like back in 1999-2000. We need something new.

  • http://www.onlinedownloads.org markov

    The deal is definitely a win-win situation for both Microsoft and Yahoo. Hope it gives a tough competition to Google.