By UTalkMarketing Editor, Clark Turner.
Is there strength in unity? Microsoft and Yahoo certainly hope so.
The internet giants have joined forces in a bid to tackle Google’s grip on the global search market. But it will be no easy fight. Google commands a 85.78% share of the market.
According to the latest figures from Nielsen US, Yahoo currently has a 6.16% share and Microsoft’s bing (which only launched in June last year) has just 3.17%.
A combined share would still be less than 10% but with the new union the pair are planning to step up competition and drive innovation in the search market.
Under the new deal bing will power the natural search results for Yahoo, while Yahoo Will handle advertising for bing.
This could mean a more talented sales force, doing a better job at monetising search, and a chance to get some traction for the bing product.
And with bing offering scale and a better product it now appears a more attractive propostion to marketers. Web advertisers, web publishers and users could all benefit from this agreement.
“Strong competition in any market is a good thing. A reinvigorated search advertising market that could result from Yahoo! and Microsoft joining forces will provide more choice for advertisers and help stimulate new innovations in online marketing,” added general manager, digital marketing services, BT Business, Ivan Croxford.
“Ultimately, Yahoo! and Microsoft have to provide a compelling experience for consumers to use their search platform. If they do that, then advertisers will put more of their spend their way.”
However while many items on the raft of planned changes will not be implemented straight away, users will soon see a change in the basic search listings and ads around them.
“Having pledged 5-10% of their operating profits ($22.5 billion in 2008) to promoting Bing over the next 5 years, Microsoft has a good chance of increasing Bing’s market share over the next year (much as they have in the US)”, says Adam Bunn, Head of SEO at Greenlight.
“That could make ‘Microhoo’ worth paying much more attention to from an SEO perspective.”
According to Worldwide Director of Digital at JWT, David Eastman, the alliance brings some tactical advantages for marketers, but little in the way of new and unique opportunities.
“Operationally, it should be easier to field a large campaign both from a simplicity standpoint (one contract/ point of contact) and from an optimisation/ targeting standpoint (linked campaigns, enhanced behavioural targeting opportunities.),” he said.
“This alone will give them short term advantage, but in an area where they compete most heavily with online networks rather than Google.”
Eastman added, “Google is heading in a completely different direction (or directions). Their core search business is in no immediate danger from this alliance and as they branch into everything other direction, most notably social, Google is still leading not following.
“They will redefine what it means to conduct an online media buy whereas Yahoo-Microsoft will give a way to do the kinds of programs we¹ve been doing for years only bigger.”
At the same time, while the Yahoo/Microsoft agreement is a useful first step, it is only a first step, the Initiative for a Competitive Online Marketplace (ICOMP) has warned.
“Looking ahead, it is clear that the search and search advertising markets are in great need of more choice and competition,” the body added in a statement.
But is it all good news for marketers? Tim Cook Group Acct Director, CheezeDMG, has warned that the new Yahoo Microsoft alliance could actually slow down advancements in technology within the search marketing space, as search engine competition within the marketplace is reduced.
“Digital marketers could find Search Engine service levels decline,” he added. “Microsoft has agreed that Yahoo will service premium level customers. This is ironic as Microsoft sees its level of service to clients as one of its strengths over Google and Yahoo.
“Google will feel less threatened in terms of service now that Microsoft is no longer servicing their own traffic, but marketers will need to make sure they have technology in place to separate the results they get from Yahoo and Bing to optimise their campaigns effectively.”
So despite the new alliance only having a 10 per cent share of the market, what can we expect from Google in response to the new challenge?
It’s a threat the market leader will be taking very seriously, according to European Managing Director, Marin Software, Ed Stevenson.
"Microsoft is not going to let Bing drift into oblivion, but remain totally committed to evolving it and to viciously competing with Google, meaning the real fireworks are only just being lit now,” he said.
“Google is well aware of the recent promotion surrounding Microsoft and Yahoo’s search engines and certainly would not have taken out a $5million advertising slot during the Superbowl had it felt completely impervious to Microsoft and Yahoo’s advances.”
Eastman added by saying that since Search was Google’s overwhelming revenue driver, their push to be a player in display and video depended heavily on their search supremacy.
So hence the launch of marketing search stories, mobile, Google docs, alongside new product releases such as Buzz which are designed to make Google search a natural extension of its users’ broader experiences.
“Mobile is a huge focus. Google maps and gmail are both default options on the iPhone they have not only built apps but have integrated themselves in key areas and have launched technology to directly compete with Bing services,” said Eastman.
“It’s a win for marketers though. Even if it (the new alliance) does not functionally impact Google, it may make them more apt to negotiate and generate the kind of competition that is good for cost efficiencies and innovation.”
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