When Microsoft Met Yahoo!
One of the most talked about deals in the global search marketplace is the recent 10-year search advertising agreement between Microsoft and Yahoo!. The much anticipated deal made headlines on July 29. 2009.
UK-based digital marketing magazine, Revolution explained the deal with help from Paul Doleman, chief technical officer of iCrossing.
Essentially, the deal allows Yahoo to adopt Microsoft’s Bing search engine and run all search marketing through Microsoft’s AdCenter platform. However, there are further implications as noted by Doleman.
This partnership is expected to simplify search marketing by reducing the number of different engines to bid across. The market share that results would be more meaningful to marketers as campaign management overheads will be cut and focus will be strengthened on maximising campaign ROI.
Dolemon further notes that this deal highlights Bing’s need for external support to enhance its market share. Though this increase in market share comes at a cost for Microsoft in terms of search marketing revenue, it is the only way to post a threat to giant rival Google.
Another aspect questions whether Yahoo’s decision to partner with Microsoft is a result of Yahoo’s belief in Bing challenging Google’s search offering or was Yahoo not left with a better choice from it’s downward spiral since the Microsoft merger fell apart last year.
Furthermore, in spite of this deal, Bing will only have 28% market share compared to Google’s 65% (June 2009 Comscore US) and this leaves a big gap to cross. Also, as a result of this deal, there is a risk of losing Yahoo’s free tools that have become invaluable to marketers, for example, the Yahoo Site Explorer.
Overall, this deal has potential positives and potential negatives for search marketers. Only time will show the real implications of this deal and the route Microsoft and Yahoo take next to challenge Google and vice-versa. However, what is clear is the significant change in the search market scene for consumers and marketers alike.
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