The Search See-Saw – Yahoo! Down While Bing Continues to Rise
Since Microsoft launched their new search engine Bing in 2009 it has slowly but surely started to erode the search market share of its now partner company Yahoo!
Figures released by comScore for January 2010 showed that in the U.S. search queries on Yahoo! dropped from 17.3% down to 17% while Bing enjoyed a 0.6% increase from 10.7% to 11.3%.
Life before Bing
The figures above take on even more importance when compared to the pre-Bing statistics from April 2009.
Yahoo! had 20.4% of the U.S. search market and Microsoft's share was only 8.2% so there has been a significant shift since Bing was launched.
What now for the Yahoo!/Microsoft partnership?
The deal between Yahoo! and Microsoft was struck with a view to combining forces to take on Google, which incidentally still dominated U.S. search in January 2010 with a 65.4% share of all searches, but how will this search trend away from Yahoo! and towards Bing affect it?
One of the finer points of the deal is that for the first 5 years of the 10 year deal Microsoft will pay 88% commission to Yahoo! for search adverts that bring in revenue on Yahoo! sites.
If Yahoo! continues to lose market share to Microsoft and Bing then it follows that they will receive less commission than they perhaps initially thought.
When the agreement was first publicised back in July 2009, Yahoo! estimated it would stand to make $500 million in extra income once it was fully rolled out, but if the current search trends continue for the next 5 years, that figure could prove to be optimistic.
Good news for Google?
With the Yahoo! and Microsoft search deal now being approved by the European Commission this agreement can now be fully implemented.
It remains to be seen whether or not this partnership will achieve one of its main aims in the long term and reduce Google's massive market share or if the current rise of Bing and downward spiral of Yahoo! will continue and Google will watch happily from the sidelines with its market share unaffected.
Yannis Loucopoulos
Managing Partner - Exchange Media
Created on 10/03/2010