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Bing to power Yahoo! as part of global search deal
Date: 31/07/2009
Yahoo and Microsoft have signed a 10-year search advertising agreement. The deal between represents a tectonic shift in the global search marketplace, with Yahoo adopting Microsoft's Bing search engine and all search marketing now being run through Microsoft's AdCenter platform.
Below is a selection of trade press analysis on the implications of this deal:
- Microsoft will also be able to integrate Yahoo's search technology into its own systems, and will compensate its partner based on the amount of traffic that is delivered through its network of web properties. For its part, Yahoo will take on a global sales role for the two firms' "premium search advertisers", and receive 88% of all search revenues produced by its assets for the first five years of the tie-up. However, both parties will continue to operate their own display advertising and sales operations, and retain separate instant messaging, email and other web platforms. Yahoo has predicted the alliance will add $500m to its annual operating profit, and contribute $275m in cost savings, as it will no longer be required to invest in developing its own search service.
- It may improve ROI in search marketing campaigns. At a simple level, the coming together of these industry giants will simplify search marketing by reducing the number of different engines to bid across. Yahoo and Microsoft together will enjoy a meaningful market share that's going to be more interesting to marketers than the two companies individual offerings. By cutting down on campaign management overheads, the deal will enable search marketers to focus their efforts even more keenly on maximising campaign ROI.
- Is Bing a real challenger? This deal shows one of two things. Either that Yahoo thinks that Bing's search has the potential to really challenge Google as a consumer search offering or that Yahoo simply didn't have a better choice. Bing's results have been perceived by some to be nearly comparable to Google's in terms of quality so is this actually a decision driven by a positive belief in the possibility of real market change? Only time will tell on this point.
- Yahoo and Microsoft both still have a long way to go. Even with their combined audiences, Bing will still on have 28% market share compared to Google's 65% (June 2009 Comscore US) and that's a big gap to cross. We can expect Microsoft to continue to grow its audience through further partnerships or acquisitions, either with smaller global search players such as Ask or AOL, or perhaps with regional players in China and Eastern Europe, but for the moment Google remains very much on top.
Sources:
www.adweek.com
www.revolutionmagazine.com
www.warc.com
