Līve Ambitions

Interesting news.  Microsoft and Yahoo has agreed to combine forces in the search market to better compete against the giant of search, Google.  They’ve launched a website dedicated to the 10 year deal called ChoiceValueInnovation.com.  The gist of the deal is that Microsoft will power Yahoo’s search for both organic and sponsored listings, and in return Yahoo will receive compensation from Microsoft.  Meanwhile, Yahoo will “become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.”  Their PPC advertising platform will be handled Microsoft’s Adcenter.

So, based on current stats, this partnership deal would give Microsoft and Yahoo approximately 30% of the total search market share in the U.S..  If I were Google, I wouldn’t be too worried - its 2 competitors have had the capacity and resources for improvements, but they simply haven’t been able to gain ground on their own.  In my opinion, if Yahoo and Microsoft couldn’t compete on their own, they wouldn’t do better together.  Unless there are some significant advancements to the Microsoft/Yahoo algorithm technology, I don’t see them expanding their search market share by much, if any.

I’m not in favor of this search deal because I believe that market conditions are best when there are many competitors as opposed to only 2.  Instead of having 3 separate choices for search, now it’s only one or the other.  Microsoft and Yahoo would’ve been better off trying to improve their own search technology.  Who knows – maybe there’s a deeper underlying meaning to the deal.  Could it be a slow transition into a merger?  What do you think?