In July 2010 when Yahoo had started testing Bing powered search they routed 25% of their search traffic to Microsoft’s Bing. What does this mean for the search engine landscape? Well in order to answer this we will need to go back to the beginning of Microsoft’s courtship of Yahoo.
This all started when Microsoft in February 2008 made a $44.6 Billion bid for Yahoo, Yahoo took the decision to end the merger discussions because its board was confident in the company’s potential upside.. Later that year Yahoo had to take action to secure its future after announcing its quarterly earnings, Yahoo said it would cut 1,000 jobs in an effort to refocus the company and reduce spending, and issued an outlook for 2008 that disappointed investors.
Then in June 2008 Yahoo announced a commercial agreement with Google. The main feature of this agreement was Yahoo allowing Google to show Google Adword ads inside of the Yahoo search engine result pages. This deal was thought to generate over $100 Million a year for Yahoo which would have secured Yahoo’s future and given them the cash injection needed to build a stronger footing in the search engine race. Unfortunately Microsoft saw this as a threat as they wanted control over Yahoo in order to catch up with Google’s huge market share, so later in November 2008 Microsoft filled an anti trust claim against the Yahoo Google agreement. This in turn forced Google into canceling the agreement as the implication of loosing the anti trust case could of left Google with a very large bill.
Microsoft, like Yahoo, have faced an uphill battle against Google, so with this in mind in the middle of 2009 Yahoo made a major announcement it was forming an alliance with Microsoft’s Bing. This being a commercial agreement and not a merger. Yahoo could decide to cancel this agreement at anytime. The main feature of this agreement is Yahoo will hand over all control of its search engine results to Bing, and Bing would pay Yahoo handsomely for this privilege.
This now effectively means Bing is the second largest search engine but is still way behind Google for market share. Google is still many years ahead of Bing when it comes to search technology. Google still releases more amazing search technology every year, take their Google Voice application for instance. You are able to speak your search term and then Google will do a search for you. Also Google’s search algorithm is being updated every day with new innovative ways to catch search engine spam, its proven that Google’s search index is the cleanest out of all the major search engines and this is the main reason why Google remains the leader. It will take something amazing to knock them off, which at this time Bing isn’t delivering.
The final outcome of a Bing powered Yahoo is unknown, one possible outcome could be that faithful yahooligan searchers become disillusioned with the quality of search results and start using Google instead. Only time will tell if the latest Microsoft manoeuvrings will move them closer to Google.