Microsoft and Yahoo Announce Partnership

It has definitely been a long time coming and inevitable that Microsoft and Yahoo would unite to have a chance to compete with Google. I actually laughed out loud during the investors call between Yahoo and Microsoft this morning when one of the legal representatives referred to Microsoft and Yahoo as a "small company" against the 78% market share lead of Google when referring to any anti-trust concerns about the deal.

While Microsoft and Yahoo predict this will give them the "scale" necessary to compete against Google, the fact remains that nearly 80% share is a very strong hold on the market--and that's just search in U.S.  Steve Ballmer admitted on the call that Google controls about 92% of advertising in Western Europe. The remainders are not wholly controlled by Yahoo and Microsoft, so it is definitely an uphill battle.

At HPG we will continue to monitor the situation and keep our customers updated on any developments that affect them. Right now there are no immediate changes. The deal is still subject to regulatory approval that is not expected until early 2010 followed by an implementation period that will likely take another 6 months or more. The end result sometime in 2011 is that HPG technicians will be working on two main platforms, Google AdWords and Microsoft AdCenter, for paid advertising. Search optimization for Yahoo will no longer be necessary once Bing is powering the Yahoo search, but our tests and experience have shown that Yahoo and Bing optimization is fairly similar anyway.

If you have any questions or would like to discuss the deal further, feel free to contact your HPG representative. Details on the deal are available here: (opens new window).

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