Microsoft’s challenge: turning Yahoos into Bingers
Eric Schmidt likes to claim that competition for Google’s search users is “just one click away”.
It’s easy to brush that off as a gesture to appease regulators, or just plain paranoia. But there’s a clear element of truth to it.
ComScore’s latest analysis of the US search market, released today, rubs in the point that Google’s users have already found out how to click elsewhere: they just aren’t doing it that much yet.
Online ad spending falls again, will keep at it
Online advertising spending fell 5 per cent in the second quarter to $13.9bn from the same period a year earlier, research firm IDC said Wednesday, with the more developed US market declining even more, by 7 per cent.
It marked a second consecutive period of declines, and IDC said that there will likely be between two and four more quarters of the same. In the US, classified advertising dropped 17 per cent in the latest quarter, display ads fell 12 per cent, and search ads held up relatively well, allowing Google to post slight growth. Asia bucked the trend and showed an overall increase in online ad spending.
Does 2 + 3 = Trouble?
With advertisers like Martin Sorrell lining up to welcome Wednesday’s Microsoft/ Yahoo search pact, it might seem churlish for regulators to take a long hard look at the alliance. But that is exactly what they’re going to do – and there’s certainly no assurance that the deal will get the green light.
The babyfood business in the US provides the biggest warning sign. Back in 2000, Gerber controlled around two thirds of the US market for jarred babyfood – not that different from Google’s 77 per cent share of US search advertising, according to Microsoft’s figures.
Microsoft-Yahoo search deal – live blog
Microsoft and Yahoo agreed on Wednesday to an online alliance that could create a more formidable rival to Google in the search business. The deal will give Microsoft a 10-year licence to integrate Yahoo’s search technology into its existing search platforms, while Yahoo will become the “relationship sales force” for advertisers for both companies.
This post is a live blog of a conference call with Carol Bartz and Steve Ballmer, the chief executives of Yahoo and Microsoft.
Yahoo’s searchers sit on their wallets
When I caught up with him earlier today, Yahoo’s new CFO, Tim Morse, said he’s certainly open to reshuffling the company’s portfolio of businesses in ways that help it make more money.
He was responding to a question about talks with Microsoft about a search partnership – though, of course, he wouldn’t comment directly on the negotiations themselves.
On the surface, it certainly looks like Yahoo could do with some help with search. Its search revenues, just released, took a tumble this quarter, even as the volume of queries from users held up. Google, which reported numbers last week, did much better.
Microsoft “will dig deep” to stay in search
Does Microsoft really have the stomach to pour another $10bn or more into the seemingly bottomless pit of internet search?
Steve Ballmer was certainly talking tough on Thursday, declaring that the company was prepared to commit 5-10 per cent of its annual operating income (2008 total: $22bn) to search for the next five years.
This is not really surprising. He has made similar comments in the past. And as Youssef Squali at Jefferies points out, based on the last few quarters Microsoft is already losing around $2bn a year in online services. So all Ballmer’s statement really adds up to is a declaration that he is prepared to stay the course.
However, coming nearly three weeks after the launch of Bing, it is the timing, rather than the content, of the message that is important.
Bing, eight days later
Bing has moved the needle for Microsoft, but not much.
That is according to figures from comScore, which showed an increase in traffic to the new Microsoft search service in the days since it was launched. Curiosity about Bing lifted the number of Microsoft searches by 20 per cent from the week before and the numbers held steady for five days, suggesting searchers liked what they saw and have been coming back for more.
That still only amounts to two extra points of market share, though.
John Gapper, the FT’s chief business commentator, says that Wolfram Alpha’s structured database poses long-term questions about the usefulness of internet search:
If all the data on the internet are simply too messy to be analysed and structured, Google will be unable to produce a service rivalling Wolfram Alpha in clarity and reliability.
This would not spell the end for Google and other search engines. But it would mean that search itself – on which we rely to map the internet – had bumped up against its natural limits. Let battle begin.
So what exactly IS a “computational knowledge engine”?
Whoever devised the “soft launch” plan for Steven Wolfram’s new search engine – er, computational knowledge engine – deserves a bonus.
Since Wolfram Alpha was shown off informally to a group of online writers earlier this month, the hype has been building fast. Before long, the question was inescapable: Has the Google-killer finally arrived?
Desperately seeking real-time search
As people increasingly transmit and relay news over the web through services like Twitter, real-time search, which gives the ability to find a clear signal for breaking news among all the static, is becoming a focus.
Google introduced some time-based filters this week to address this. A “Show options” link at the top of results pages unveils a new sidebar when clicked.
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