Bing's search gains could be sunk by Yahoo's losses

For the second straight month since its rebranding from Windows Live Search, Microsoft's Bing service has gained usage share in the US, according to private analytics firm StatCounter. And the trend for Bing is growing, picking up another 1.18% of US Internet user searches during the month of July, to 9.41%. That's after gaining just 0.42% for the month of June.

Here's the problem: While part of that gain came at Google's expense, the other part came from Yahoo, whose searches are soon to be served by Bing under the terms of last week's deal. Although Yahoo's US search share was nearly flat -- down by only 0.09% -- it's continuing its downward trend, losing about 3% of US searches since the beginning of the year. That's about one-fifth of its search audience.

This could mean that, while searches conducted through Bing continue to improve, albeit at a slow rate, the combined usage share of Bing plus Yahoo could remain flat. Google's usage share drop of nearly 1% last month, by StatCounter's numbers, is not indicative of a long-term trend. With 77.5% of the US search audience, the laws of physics (among other things) are preventing Google from climbing much higher.

So while last week's deal could give Bing's search and Microsoft's AdCenter access to one fifth of US searches by the end of the year, that number could conceivably remain stagnate unless Yahoo's portal (which remains its own) improves dramatically more than its current front page redesign would indicate. Had Yahoo and Microsoft made this deal back in 2004 when deals were first proposed, Microsoft could have enjoyed as much as 32% of global searches, at a time when Google's share was still under 55%.