Yahoo and Microsoft join forces against Google

by Stevie Smith - Jul 29 2009, 16:30

It’s been a long time coming, but Microsoft’s attempts to (at least partly) assimilate Internet pioneer Yahoo have finally been successful. Specifically, the Redmond-based software beast can now expect to ramp up its ongoing challenge against Google after agreeing to partner with Yahoo’s online search engine business.

In a deal announced on Wednesday, the two industry heavyweights will be joined at the search-engine hip for the next decade as they pool their individual resources in a combined effort to rein in the persistent search and advertising dominance of Google’s seemingly unassailable platform.

The deal comes at a potentially good time for Microsoft as its recently upgraded search engine, renamed as Bing, will now become the default search system for all Yahoo traffic – which opens Bing to the online world’s second largest search audience after Google.

“Microsoft and Yahoo know there’s so much more that search could be,” commented Microsoft CEO Steve Ballmer regarding the deal. “This agreement gives us the scale and resources to create the future of search.”

However, while the combined efforts of Microsoft and Yahoo may raise a few perplexed eyebrows amongst the executive masses at Google, Bing’s suddenly enhanced audience access is still likely to fall well short in terms of posing a significant threat.

According to U.S. search figures released by comScore, Google’s market share dominance currently stands at around 65 percent, while Microsoft and Yahoo hold a combined share of just 28 percent.

That gap grows further when viewed on a global scale, with Google holding an improved 67 percent market share while Microsoft and Yahoo account for just 11 percent.

Details related to the partnership, which suggest Microsoft was perhaps desperate to make inroads against Google, reveal that Yahoo will receive some 88 percent of all ad revenue generated by Bing search requests for a period of five years.

“This agreement comes with boatloads of value for Yahoo, our users, and the industry,” enthused Yahoo CEO Carol Bartz, who assumed the chief executive position in January of 2009 and has been working to stem the company’s spiralling performance.

“…I believe it establishes the foundation for a new era of Internet innovation and development,” she added.

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