Propel Marketing, LLC

Bing, Yahoo to Merge, Microsoft Bets Big on Middle America

Bing and Yahoo to Merge Search in 2010

As news of Microsoft and Yahoo’s search partnership deal has darted around the blogosphere and across the world, SEMs and SEOs are coming to terms with the realities:

1. BingHoo has gained some search market share, but not enough to really threaten Google’s dominance in the short term.

[The Most Important Facts, and Some Opinion, Techcrunch.com, 07.29.2009]

2. Yahoo is out of the search game.

[It's Finally Over..., SearchEngineLand.com, 07.29.2009]

3. Bing will be the new Yahoo search engine starting in early 2010, and will profit from ads displayed.

[Yahoo gives up, Wired.com, 07.29.2009]

4. Yahoo will assume online advertising and relationship management services for both companies.

[It's Finally Over..., SearchEngineLand.com, 07.29.2009]

5. Microsoft just bet heavily on “Middle America”, Yahoo’s primary demographic, and wants their input into their Bing search algorithm.

While these are all worthwhile insights, the most interesting to me is the last. In a period of economic downturn, Microsoft has chosen to shell out vast sums for a 10 year partnership which gives them open access to Yahoo’s search functionality, the single most powerful revenue generator for the site. What remains to be seen is how the Yahoo user base will shape Bing’s evolution, and whether Yahoo’s search will be completely integrated or remain slightly separate.

Bing was hot right out of the gate, and continues to fare well with users looking to make purchases, but recent research shows users choose results at roughly the same rate from all 3 major current search engines in a blind test. Microsoft seems to be betting that there is a demographic overlap with buy-motivated searchers and Yahoo’s enormous user base, but this is questionable in the short term, what with global economic depression felt particularly in the middle-income manufacturing belts of the US. The current stereotype is that people go to Yahoo to “waste time” — how does Microsoft turn that into a buy? Extended sales pitches targeted directly to your Yahoo user patterns? Across weeks at a time? Will BingHoo turn into the new place to subtly place the seeds of brand for travel, shopping, health and local search?