RankPay SEO Blog

Google Dominance Challenged as Microsoft’s Bing Swallows Yahoo!

Google owns the search engine world and Bill Gates is not happy about that, so Microsoft has been positioning itself to challenge the upstart rival on several fronts. The two are direct competitors for several cloud computing and SaaS solutions (Software as a Service) amongst others, but it is the bitter, to-the-death fight over the search engine market which is attracting mainstream attention.

Microsoft’s Bing is now providing the engine power for Yahoo! search users in Canada and the United States.

We shouldn’t underestimate the significance of what is going on. When this century is out, the Microsoft/Google business showdown is going to be analyzed and used as a business case study in how to gut a competitor.

Google commands a 65.8% share of the US search market, Yahoo! takes 17.1% and Microsoft’s Bing has a lowly 11% (according to Comscore’s July 2010 data).

Just over a year ago, Microsoft made a $47.5 billion bid for Yahoo! which was rejected by the shareholders but who now wish they had taken the deal – Yahoo!’s capitalization trades at far less than that of today and market share has continued to decline – the numbers have all been pointing down. On the other hand, why is Microsoft so keen – Microsoft has so far lost $4 billion with its online division and efforts to gain traction by organic growth have failed. The only way Google can be challenged in the search engine space is if a rival has a large enough chunk of market share.

Either Microsoft was going to take Yahoo! over or vice versa; but Microsoft is the one with the cash.

Microsoft developed Bing to deliver powerful new search engine results, and Microsoft adCenter to serve up the revenue generating advertisements which forms the profitable prize of the search engine market. Soon after the 2008 takeover deal faltered amidst unseemly price squabbles, it became very clear that if anyone is going to take on Google they need to start capturing market share and all of the Big G’s competitors were back-pedaling.

Six months ago, the regulators approved a “partnership” deal whereby Yahoo! uses Bing to power search results and Microsoft adCenter will serve up the search advertising. The US and Canada is now enjoying the new arrangement though Yahoo! is still using its own ad service as Microsoft tries to get adCenter ready for the Fall/Christmas selling season. Only English searches are covered, though multi-lingual and overseas markets can expect to be receiving search services under the new arrangement as it rolls out through 2011-2012.

Strangely enough, Google beat out Microsoft to provide search services for Yahoo! Japan…someone in Tokyo was not reading the same corporate hymn sheet as the folks in Sunnyvale, California!

So, what do we have?

Google has 65.8% of the US market and Yahoo!/Bing has 28.1%.

So how will Bing reverse that market split?

Reading the corporate press releases it quickly becomes clear that there is the usual corporate grunge – scale of economies, cost reduction, synergies, market innovations, unique service offering and blah, blah, blah.

Who cares unless you are an investor!

Here we are concerned with search engine driven business and SEO implications. What do you, as a website owner need to be aware of and more importantly, what do you need to do?

Google is the main player in town, so it makes sense to continue to prioritize SEO efforts to maximize the returns from Google users but, Bing is a significant chunk of the market too. To a large extent, SEO life has become simpler because search optimization needs to focus on two search engines instead of three.

At the moment, you need to do nothing except monitor the situation between Google and Bing and refocus SEO efforts directed at Yahoo! to one or both of the remaining market leaders in the search engine space.

Takeaway

The Bing/Yahoo! partnership is a clear challenge to Google’s search engine domination.

Whilst the deal is highly significant for investors and analysts, it has restricted impact for website SEO at the moment.

Bing traffic is likely to improve in terms of quality and volume because of the improved position of one search engine with a third of the market instead of two, relatively small players. This is good news for many SEO clients because Bing traffic converts well, even better than Google traffic for certain verticals and niches.