Thursday, July 30, 2009

Microsoft marries Yahoo to fight Google

By: Subhadeep Bhattacharjee

The Great Internet War has just intensified with Microsoft and Yahoo joining forces to wage a war against industry giant Google. Both Microsoft and Yahoo consummated their on and off courtship to sign up for an online venture to taken on Google. The proposed 10-year deal deal however faces tough scrutiny from antitrust regulators, who frequently have rejected deals that reduce three major market players to two. It will not take effect until antitrust approval is granted.

Under the agreement, web sites from both companies would use Microsoft's recently launched Bing search technology. In short Yahoo will now be powered by Microsoft. Yahoo would handle worldwide sales of premium search-related advertising for both companies. The deal allows Microsoft to gain access to Yahoo's substantial traffic. Microsoft will thus pay its partner 88 percent of the search revenues generated on Yahoo sites.

Advertising executives around the world have given a thumbs up to the deal. Experts predict that it will provide marketers with more bang against Google and give the advertisers a good option to choose against Google. They are terming it as balance into the search and display markets as Google almost had a monopoly till now. The online advertising industry which currently stands at $30 billion is expected to double in the next five years.

Yahoo and Microsoft together account for about 28 percent of Internet searches performed while market leader Google is way ahead with 65 percent market share. Bing which was launched by Microsoft is seeing some encouraging signs with its market share increasing over its predecessor Live Search. Now with Bing and Yahoo not competing against one another they might grab a bigger piece of pie and dent some bit on Google.

Interesting both Microsoft and Yahoo have come together after having individually failed to cause any injury to Google. Microsoft and Google have been engaged in a battle ever since Microsoft launched the Bing search engine. Google replied it announcing their Crome Operating System. Not to be left behind Microsoft answered back with announcement of free Office 2010 to take on Google Docs. Only time will tell if the marriage of convenience between Microsoft and Yahoo can cause any damage to Google.


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