Yahoo & Microsoft Union Approved – Finally Some Real Competition for Google?

In most markets Google is the dominant search engine by a significant margin. No more so than in NZ where, according to latest Hitwise figures, Google’s share is 92.8%.

Add in the fact that YouTube, also owned by Google, is the 2’nd biggest search engine globally & it’s clear Google dominance of the NZ search market is almost total.

New Zealand Search Engine Shares

The extent of Google’s dominance in other markets varies, e.g. Australia 87.3%, US 71.2%, & UK 89.43% (source: Hitwise Jan 2010). And of course there are also some notable markets, such as China, Japan & Korea where Google plays second fiddle (or lower, as in the case of Korea).

Despite this, Google is clearly the #1 search engine globally. According to latest figures from Hitslink Google’s global share in January exceeded 85%.

In many quarters growing concern is being voiced about Google’s increasing dominance and the associated market control it brings. Given this, it’s not surprising that the Yahoo & Microsoft combined search and advertising arrangement has just been given clearance by both the European Commission and the U.S. Department of Justice.

Clearly the hope of these regulatory bodies is that the combined strength of Microsoft & Yahoo! will present Google with a serious competitor & keep the market competitive.

Whether this will be the case remains to be seen, given Yahoo’s share of the U.S. search market has been steadily declining. In January 2010, its share had dropped to just 14.63% compared to Bing’s share which had grown to 9.64% according to Hitwise. Most of Bing’s growth seems to have been at Yahoo’s expense rather than Google’s.

The 10-year agreement will see Microsoft taking over Yahoo’s organic and paid search platforms, while Yahoo handles sales. In other words, Bing will become Yahoo’s underlying search engine & Microsoft adCenter will replace the Yahoo! Search Marketing PPC platform, AKA ‘Panama’.

Merging these is going to be a BIG job & won’t happen anytime soon. According to a joint statement issued on Feb. 18, the two companies “hope to make significant progress transitioning U.S. advertisers and publishers prior to the 2010 holiday season, but may wait until 2011 if they determine the transition will be more effective after the holiday season. All global customers and partners are expected to be transitioned by early 2012.”

Given Microsoft adCenter doesn’t currently operate in Australia & NZ, I don’t think we’ll be seeing Google’s domination on the PPC advertising market in this part of the world challenged by Microsoft/Yahoo in the foreseeable future. Any more immediate challenge is likely to come from different quarter altogether.

And that’s Facebook…something we’ll discuss in a future post.

About the Author Mark Sceats

Mark is a Partner and Senior Consultant at SureFire which he founded back in 2002. Prior to establishing SureFire he worked for KPMG Consulting. Today Mark heads up SEO, embracing the challenges that can come with complex website implementations. Outside of work, his interests beyond his family are running, snowsports, diving and fishing (badly).

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