RSSBing gains show why Microsoft-Yahoo search deal is a dumb idea
By Joe Wilcox | Published March 12, 2010, 5:11 PM
One of Microsoft's major justifications for the Yahoo search deal is scale. CEO Steve Ballmer has repeatedly asserted that greater scale would allow Microsoft to improve search accuracy. Just last week he told Search Marketing Expo West attendees: "The ability to put together Yahoo's volumes and Microsoft's volumes and use that in a way that improves the experience more, let's call it all involved parties, we think is absolutely fantastic."
But the scale argument presumes that Microsoft and Yahoo would combine search share. The deal is in place but not fully implemented, and already Microsoft's Bing is taking away search share from Yahoo -- not Google. In February, Bing's US search share reached 11.5 percent, up from 11.3 percent month over month, according to ComScore. Yahoo share declined to 16.8 percent from 17 percent during the same time period. In June 2009 -- the month before announcing their search deal -- Yahoo search share was 19.6 percent and Microsoft 8.4 percent. But Microsoft already was rising, because of the Bing launch and millions of dollars in supporting advertising. For perspective, Google search share was 65.5 percent in February and 65 percent in June 2009.
The Microsoft-Yahoo search deal is a dumb idea, for three main reasons:
1) Microsoft's marketing push behind Bing shows that share can be gained organically, without taking on the expense or logistical hassle of managing Yahoo's search business.
2) Microsoft search share gains foreshadow the inevitable: Microsoft-Yahoo combined search share will diminish rather than aggregate. Combined share would have been 28 percent in June 2009; 28.3 percent in February. At first blush, the numbers might seem encouraging for aggregated share but the cost is declining Yahoo share. Cannibalization is inevitable.
Also the ComScore share data is for search engines and doesn't include heavily searched cross-domains like YouTube. Americans conducted 9.9 billion searches at Google in February, 2.496 billion at Yahoo and 1.498 billion at Bing. YouTube (and a few other Google sites): 3.553 billion or about 30 percent more than Yahoo. If ComScore ranked YouTube like Google, Yahoo would be No. 3 in search share.
I first warned about flawed combined search share math about a year before (May 2007) Microsoft gave up its hostile Yahoo takeover: "There is no guarantee a Microsoft-Yahoo could successfully aggregate search share." Bing is more likely to cannibalize Yahoo share than combine with it over the next 12 months. In July 2009 I predicted: "Combined Microsoft-Yahoo share will be less than 20 percent within 12 months of the deal's closing." We'll see.
3) Search is -- or was -- Yahoo's crown jewel. Yahoo started as a search engine and remained a contender even as Google gained share. As I asserted in May 2008: "Removing search would be akin to lobotomizing Yahoo." That's essentially what the Microsoft search deal will do to Yahoo.
Yahoo's banner advertising business is still big, but its future is uncertain during the Microsoft search-take-over transition. Meanwhile, Google has added banner ads to YouTube and to mobile search.
Yahoo is little more than a beloved brand without search, particularly with CEO Carol Bartz dismantling the company's other prized assets. You know, little things like disbanding the mobile group earlier this week. Would someone please take away the axe from that woman!
So what do you think? Should Microsoft and Yahoo have cut that search deal? Please answer in comments.
Joe,
You are really amazing. Being so wrong and uninformed yet you still have to courage to write about this topic. It’s laughable to misunderstand the meaning of 'scale' from size of data to market share. Can’t you spend a little time on learning the topic before you writing about it?
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|"But the scale argument presumes that Microsoft and Yahoo would combine search share." - you are so wrong, but you can't be blamed because only a few people in the world understand how machine learning works. Giving your poor judgement shown from your articles, you won't come close to understand the idea.
Scale is the key for a search algorithm to work well. You can have a very good machine learning algorithm, but if you don't have enough learning data, you won't get the right results.
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|Wait - before the Microsoft-Yahoo search deal, Microsoft did not have access to Yahoo's searches or data. After the deal, its search engine does have access to Yahoo's searches and data, purportedly allowing it to be more accurate.
That's true even if Bing took share away from Yahoo isn't it? It's still more accurate because it still gets to see Yahoo searches and data.
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|I do not see how Bing can match Google in the foreseeable future. The main reason is that it does not have 10 million scanned and searchable books in its database. It is a lot of information! MS has tried to mimic that, as well, but they abandoned that effort. Too bad! Another reason is that Google search gives you AN answer to your question and an opportunity to learn more and improve your results. It gives you a perspective. Bing tries to give you THE answer which is actually AN answer.
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|Joe, you shouldn't EVER use the word "dumb" considering your editorial content. ;-)
The deal was done to instantly push Yahoo search share to Bing... separating the two is just silly given the deal. It's not like MS isa laking in profits anyways.
The average web user would benefit using Bing over Google (as the default) since it's easier to use with better searches for normal people. With Bing you can quickly find retail store locations, phone numbers, without going to websites.
Google is like the "useful for a scientist" tool with it's horrendous and disjointed interface & search results (pandering to advertisers).
I use both but Bing is the better recommendation for friends & families.
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|I completely switched to www.bing.com for my search and haven't looked back. It works great for just about everything and is much more pleasing to use than the alternatives. If I'm searching for something arcane like oddball computer error codes then Google seems to do better but unless you are a total techhead, www.bing.com is much more usable.
So, I would imagine the responses here would be slanted towards technical people but for the overwhelming majority of people who think anyone reading or posting on a site like this are geeks.... www.bing.com is a great search engine.
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|And Joe is writing this from his long experience of Managing multiple technical companies. His expertise on Business deals is world renowned and to top it all, he is an Expert on Microsoft.
Get a grip Joe.
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|It won't be long before M$ purchases Facebook and possibly even Yahoo down the road in about 5 years or so, assuming the search deal plays out the way M$ hopes it will. As such, only time will tell if M$ can translate 28% into slow and stead gains against Google.
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|Yes Joe. Because the whole world is only United States.
Did you check the search market in Europe and in Asia before writing this article?
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|Keep pimping Google. You say you don't like MS because it was 'bad' What do you think G does?
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|Bing video search is far better than Google.
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|Bing blows.
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|Only losers use anything but Google.
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|I think MS and Yahoo understood this. Yahoo needed the money and MS needed the users. So MS bought Yahoo's. Seems to me that the deal has worked as intended for both parties? Ultimately buying customers is a losing proposition, which is why Google doesn't care and just keeps making their search better and attracting more hits.
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|Those of us who have been online for a few years remember what life was like before Google came around...Microsoft wanted to bleed internet users for every cent they could; they were greedy and arrogant. I would never switch to Bing simply because Google works and they give something back to world - even though they are a monopoly. If m$ gained dominance we all know what would happen - huge ad banners, 2mb inboxes for email, having to pay for this and that. m$ had their chance and blew it. I personally couldn't care less if Bing lives or dies.
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|You know what, you have made a very valid point. I remember clearly when we had 2MB inboxes, pay for this, pay for that, ads, ads, ads....back when Google was nothing. MS indeed had their chance but they were way too greedy. They wanted big $$$$ fast. They charged for their services. Google on the other hand was/is very smart. They take the long way to $$$$ and they succeed. Perhaps MS has realized this but one needs to do the right thing at the right time and MS certainly didn't. Looks like MS is now trying to do what Google did but it's a bit way too late and MS will always be behind Google regardless whether their (Microsoft's) services are better. Just my opinion...
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|"Those of us who have been online for a few years remember what life was like before Google came around"
The life was just fine.
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|"and already Microsoft's Bing is taking away search share from Yahoo -- not Google"
Who uses Bing? Every person I know, including me, hates the crappy search wheel! It is a complete failure!
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