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Microsoft and Yahoo announce search partnership

Integrated PR - 29th July 2009

Big news today in the world of search.  After their lengthy on-off courtship, Microsoft and Yahoo have announced a major new partnership that they hope will allow them finally to compete more effectively against Google. 

Microsoft’s recently launched ‘decision engine’ Bing will henceforth power Yahoo’s search pages, while Yahoo is to handle search advertising for both companies.

The rationale for the deal is that Bing offers new and better search technology than Yahoo was able to offer, while, in addition to revenue, Yahoo’s search advertising strength will generate data needed for the further improvement of Bing.

Microsoft’s CEO Steve Ballmer explains it like this:

“This agreement gives us the scale and resources to create the future of search…Success in search requires both innovation and scale. With our new Bing search platform, we’ve created breakthrough innovation and features. This agreement with Yahoo will provide the scale we need to deliver even more rapid advances in relevancy and usefulness.”

“There’s a feedback loop in the search business — the more paid ad searches you serve, the more you learn about what people are clicking on,” he continues. “Scale drives knowledge, which drives innovation and relevance.”

For more detail, see ZDNet’s report here.

Will it work? In its favour, Bing has got off to a better start than many – ourselves included – predicted, although at this stage many believe Google remains a superior product.  Also, competition should benefit the consumer.  In the US, Google has about a 70% market share of search, and a higher proportion in most other places (around 80% in the UK).  Despite Google’s ‘Don’t be Evil’ philosophy, a decent rival would encourage value for money and also help drive even more innovation.

But, as the e-Consultancy blog observes, even if Bing ends up the better product, there’s no guarantee that the punters will follow:

In blind taste tests, Pepsi has reliably trounced Coke in Pepsi Challenge after Pepsi Challenge for the past 35 years. Where the rubber meets the road it just doesn’t matter. Coke’s the market leader.

At this stage, we’d put money on Google staying comfortably ahead, but we’re rooting for ‘Microhoo’ to do well, because it ought to be good for everyone.