The love-hate relationship between Microsoft and Yahoo will be tuned to “hate” for the remainder of the month.
In private, the companies are working on separate versions of integration plans that will send some Yahoo engineers to work for Microsoft as it prepares to take over delivering automated free and paid search results to Yahoo. Continue reading "Microsoft and Yahoo keep punching at each other"

It’s hard to know how much to read into the gains that Bing has notched up in its first eight weeks, but one thing’s for sure: if it hadn’t shown these early signs of life Microsoft would currently be facing a barrage of criticism and some very difficult decisions.

The latest figures from comScore today show Bing clawing back half a percentage point of the US search market for Microsoft in July. At 8.9 per cent, its share is now up nearly a point from the 8.0 per cent recorded in May. Continue reading "The Bing bounce"

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. Continue reading "Microsoft’s challenge: turning Yahoos into Bingers"

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.

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. Continue reading "Does 2 + 3 = Trouble?"

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.

Continue reading "Microsoft-Yahoo search deal - live blog"

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. Continue reading "Yahoo’s searchers sit on their wallets"

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. Continue reading "Microsoft “will dig deep” to stay in search"