The tech world was abuzz this week with the news that the merger between Microsoft's and Yahoo's search operations is a go. How will this affect the search engine landscape? Who will benefit, and who will end up losing?
There's no question that Google is currently the search powerhouse in all the world. Estimates of Google's market share in the US range from 60 to 70%; they're estimated to enjoy a 90% share in the UK and other markets outside the US. There are two ways to look at the leftovers: either Microsoft (10%) and Yahoo (20%) will benefit by joining forces; or Google will get even stronger with effectively one less competitor to worry about. Noted tech blogger John Dvorak believes the latter and points out that the market agrees with him (Google's stock is up, while Microsoft's and Yahoo's are both down).
As far as Microsoft's new Bing search engine, opinions vary. Britain's Channel 4 calls it "critically acclaimed," while Dvorak is less flattering, saying:
"Let's get one thing straight: For a search engine to be successful against Google, it has to show noteworthy superiority. Bing actually shows no superiority whatsoever."
He also points out that "Microsoft seems to think that by making the results prettier, people will want to use the system more." Google's success would certainly seem to belie that strategy - it's the number one search engine in the world, and the results aren't "pretty" by any stretch of the imagination.
And what does Yahoo bring to the deal? They've fumbled in recent years by not taking advantage of opportunities and mishandling previous business deals and potential mergers. Yahoo could certainly use some help, but Bing may not be the help it needs. Writing on Forbes.com, Mike Masnick calls Yahoo's deal with Microsoft "misguided." He says that Yahoo decided to switch their strategy from portals to search around 2002, and started buying up competitors then. In essence, they've been churning for seven years, focusing on the wrong things (market share instead of relevance) and turning over their search backend to Microsoft isn't going to help them now. As Masnick notes, "for most people, Google is good enough. The battle is over in search."
In summary, it appears that while the merger between Microsoft and Yahoo might not hurt either of them, it's not going to hurt Google anytime soon either. Unless the new Bing-powered Yahoo search comes up with something new that users just have to have (or a marketing plan that convinces them they do), Google will continue to be the powerhouse in search, giving them time and money to continue expanding the Google empire into all sorts of online, computing-in-the-cloud services.
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