What’s Google’s next move after Microsoft-Yahoo Deal?

Google is in a difficult situation. As Microsoft and Yahoo are partnering to create a more credible search competitor, many are left wondering what will be the search giant’s response.

After courting Yahoo for several years now, Microsoft is hoping to expand its share on the online search market. The Redmond company is pushing its Bing search engine to the next big search market leader, Yahoo, in exchange for billions of dollars worth of advertising revenue.

With Yahoo going out of the search game, the search and advertising deal with Microsoft is set to change the online search market hierarchy. Following this, Google will still be the market leader with 65 per cent (latest ComScore figures) while Microsoft’s Bing will trail with an approximated 30 per cent market share (Yahoo and Bing combined).

So who does the search?

As details of the imminent deal keep emerging through the morning, reports say that Microsoft’s Bing search technology will replace Yahoo Search results. It is yet unclear whether the changes to Yahoo’s search engine will be very visible, but most likely a “Powered by Bing” or similar branding will at least be added to the search results.

As pure speculation, one might guess that in the future, Microsoft will implement more of Bing’s new search elements into Yahoo’s search page, such as quick video previews, seamless image search results and categorized text search results.

The money is on the ads

While Microsoft will gain in search engine market, Yahoo will still control the advertising on its own websites and will also sell ads for some of Microsoft’s, all using Microsoft’s ad technology, according to a All Things Digital report.

The report says that for the first two years of the deal, Yahoo would keep 110 per cent of the revenue, while in the third year the company will get 90 per cent. In other words, many billions of advertising dollars would go into Yahoo’s pockets, as it sells ads for both its sites and Microsoft’s.

The Google reaction

In the past, Yahoo attempted to do a similar advertising deal with Google in 2008, but after an intervention by the Department of Justice (DOJ), threatening with an antitrust lawsuit, the deal was cancelled.

AdAge is reporting that Microsoft was lobbying the DOJ against the Google-Yahoo deal at the time. The publication continues saying that now Microsoft is concerned about retaliation from Google, which could lobby regulators to delay the implementation of the expected Microsoft-Yahoo deal.

The pressure is on Google

Microsoft Bing up to great start since it launched a little while back, getting mainly positive reviews. Taking over Yahoo Search will mean that Microsoft will control almost 30 per cent of the search market, with Google still leading the herd with 65 per cent. But for how long?

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Jim Love, Chief Content Officer, IT World Canada

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