Yahoo and Bing Gain Market Share

Yahoo and Microsoft try to gain on Google

The rumors of the Microsoft/Yahoo partnership have finally realized into a partnership which looks to try and take a bigger piece of the pie that Google dominates.

Last year, Yahoo! turned down a $44.6 billion takeover bid from Microsoft.  After the deal fell apart, there was still much talk over whether the two companies would be able to find a way to complement each other.

The way the new agreement is going to work is Bing will be the search provider for Yahoo! which gives the two companies a much larger market share than they had on their own individually.  Adage.com reports that “Execs in Redmond never conceived of the deal as an upfront purchase of Yahoo’s search traffic but as a deal in which Yahoo would be compensated from a share of revenue from the sale of search ads. Yahoo would be allowed to sell search ads on Bing.com as well as its own site, giving it more search inventory to sell and making it a bigger player in the search sales front. It would also immediately be able to save millions by not having to maintain its own search infrastructure.”

What this means for Yahoo! is that they are able to cut costs while at the same time potentially have a large future revenue stream.  Yahoo! believes the deal will boost their annual operating income by about $500 million.  What it means for Microsoft is that they will now have an estimated 30% market share for the online search market.  The larger market share for Bing should help to bring in more advertising dollars.  So far, it seems to be a win/win for the two companies.

However, the problem still remains are users going to like the Bing search experience.  I have tested Bing fairly extensively and I must say that it really is no Google.  Bing has some cool features, but Google still is hands down the best search engine on the market.