BingHoo

by John Rowles

IDX Search Entrepreneur

Author website

It’s official, Yahoo, the original search brand, is outsourcing its search function to Microsoft. I don’t think either Microsoft or Yahoo had a choice. It’s a shotgun marriage.

Those work out all the time, right?

Coming out with something that is noticeably better than Google’s Search experience is the only way anyone will  take significant search audience share from them, because despite all the hype around Tweets and FB, Search is still the fundamental App that makes the Web useful and people need a real reason to switch from what they like and are used to.

Failing that (as Microsoft  has with every incremental redesign of their search offering, including Bing), Redmond probably figured why not buy a solid, if distant, second place?

Yahoo knows how this works: A combination of loyalty and laziness is the only reason they still have enough users that Microsoft is even interested in this deal.

So what does this mean for your SEM efforts?

As Wired points out in a good take on this deal, “…by capturing one opposing army, (Microsoft) dramatically simplifies the battle lines and creates a two-sided conflict.”

Google knows how to hit Microsoft where it hurts, most recently by forcing Microsoft to sacrifice its cash cow, Office, by making it available on line next year to counter Google Docs. So far, Microsoft has not been able to land an equally  solid punch on Google.

That has to make Steve Ballmer’s forehead all purple with the veins popping out, like the evil aliens in the original Star Trek pilot. I don’t think I could work for Ballmer. I first saw those aliens when I was like 6, and I still have nightmares about them.

….but I digress…

One way Steve could finally get some would be to introduce serious competition in contextual text ads, the Web advertising form that Google invented and the only ad model that works on the Web (Exhibit A: They made Google $5.5 Billion last Qtr.).

Real competition from Microsoft in the form of lower costs per click could drive Adword prices down, which all by itself does nothing to take overall search audience share from Google, but it would hurt them where it counts — in the profits that Adwords generates.

That would be good news for search advertisers, who would be reaching more people for less money,  and it would be a win-win for Microsoft — they would make more than they are making now on contextual search  and they could finally land a punch on Google.