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by Stephen Logan on 17th July 2009
Despite shelling out millions in developing and marketing Bing, Microsoft’s plans to conquer the search engine world don’t appear to be stopping there. Overnight it emerged that the IT technology giants are in late stage negotiations to finally seal a deal for Yahoo.
Patience clearly isn’t a word bandied around too readily in the halls of Microsoft’s Seattle HQ. Whilst Bing remains stuck in third place with only an 8.4% share of the US search market, it is still growing. Yahoo on the other hand is facing shrinking search volumes and a brand that is arguably more synonymous with news than it is with its status as a search engine.
In fairness to Yahoo, the company still commands over 19% of all searches in the US according to the most recent statistics. But even with the acquisition of Yahoo, Microsoft still have a long way to go to catch runaway leaders Google.
With Yahoo apparently haemorrhaging money, this is probably not the worst time to be considering a multi-billion dollar takeover. After the furore that followed their refusal of a $45 billion deal last year, again with Microsoft, it could also ensure that the Seattle-based giants get a little more value this time around if a deal is concluded.
The search industry as a whole is hugely lucrative. Despite the economic slowdown Google are still maintaining good levels of profit, most of which comes from paid search. So perhaps for Microsoft it could be seen as a case of ‘if you can’t beat ‘em, buy ‘em’. Take out the nearest opposition and start challenging the outright leaders. If we’ve learnt anything over the years, it is that Microsoft doesn’t usually accept being second best, let alone third.
It will be interesting to see how this story develops and what the reaction will be. For me, Bing is a superior search engine, both in terms of its SERPs and general layout. So what will Microsoft so with Yahoo? Will it keep it as it is or integrate Bing to create a more cohesive singular brand identity? The release of Bing has generated a tidal wave of interest right across the search industry; could this perhaps be seen as a step backwards or even undermining the credibility of Bing as a standalone search engine?
Whilst no ink has been put on a contract we have to treat this news as speculation. However, Microsoft were ruthless in their pursuit of Yahoo previously, so it appears this could well be a story that has legs. We of course will be keeping a keen eye on developments as this could have huge implications throughout search and SEO. You’d have to assume though that second time around Yahoo would be more inclined to accept a bid, particularly considering the backlash they faced from shareholders last time around and their slump in fortunes since. But in business, nothing is ever certain until the deal is done; one to look out for certainly though.