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Search Engine War Games

4 MINUTE READ | July 9, 2015

Search Engine War Games

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Martin Rudler

Martin Rudler has written this article. More details coming soon.

Halfway into their negotiated 10 year partnership, this past April, Yahoo & Microsoft announced an amended agreement. This afforded Yahoo far greater mobile & desktop search flexibility, giving legs to its proprietary ad serving platform, Yahoo Gemini.

With AOL & Microsoft shacking up shortly thereafter, and rumors of a Yahoo-Google partnership swirling in the air, the battle for your searches appears to be, once again, heating up. As such, we thought this was a great time to review the recent history of the 3 online giants and how recent events might be indicators their long term intentions & future.

First things first, I will point out the obvious: Google is winning. In the month preceding the Yahoo-Bing re-negotiation, a comScore report of Desktop share showed Google holding 64.4% of total search volume (comscore). The report however, was not without significance as Microsoft climbed to 20.1%, the highest it’s been at any point since the launch of Bing in 2009, offering valuable insight into Bing’s motivation in agreeing to seemingly less favorable terms with Yahoo this past April. Simply put, this suggests Yahoo is not as important as it once was to Microsoft, and Bing Search/Bing Ads is well on its way to be a profitable standalone product:

Blog Shot

*source: comscore

What comes next for Yahoo however, is where things become interesting. Before launching into speculation, below is a brief history to keep in mind:

  • February 2008 – Microsoft becomes the last of the 3 search engines to develop its own PPC ad serving platform, Microsoft adCenter. Previously, MSN served ads from Overture & Yahoo, but would go on to serve MSN exclusive ads until 2010.

  • June 2008 – Yahoo stickes deal to use Google’s technology with Google ads appearing on some Yahoo search results (would be abandoned due to anti-trust laws, namely in EU)

  • May 2009 – Microsoft relaunches MSN search, now branded as Bing Search.

  • July 2009 – Yahoo signs deal to outsource its search to Microsoft (implemented Jan 2010). Originally named the Microsoft Search Alliance, the partnership would become known as the Yahoo! Bing Network.

    • Should be noted these negotiations took place following Microsoft’s failed attempt to buy Yahoo for a cool $45 billion, and for many appeared to be Yahoo conceding it simply could not compete with search giants MSN & Google.

    • Resulting from the joint venture, Bing would power 100% of Yahoo search results, and in exchange receive 12% of all revenue from Yahoo ads.

  • December 2014 – Yahoo replaces Google as default search engine for the Firefox web browser as part of a 5 year deal.

  • June 2015 – Announced June 2015 AOL/Microsoft announce partnership by which AOL will take over Microsoft’s sales of display, mobile and video ads on properties like, MSN, and Xbox.

  • April 2015 –– Microsoft & Yahoo announce an amendment to 2009 agreement providing Yahoo with more flexibility across mobile & Desktop. Notably – Yahoo can now partner with other companies to power its search platform as long as 51% of all search results are still delivered by Bing.

    • Microsoft becomes exclusive seller of ads delivered through Bing.

With this latest move in April, the big question is how exactly will Yahoo position itself moving forward. Some suggest this opens the door for a Yahoo-Google partnership (8 years removed from the latest anti-trust busted attempt). Others point to Marissa Mayer’s grand (albeit speculative) ambition to mount a serious attack on Google’s stranglehold on the market with its own proprietary search algorithm to power Yahoo results.

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Regardless of its form, the next step will undoubtedly be centered on mobile. Unconfirmed rumors suggest Yahoo is already testing up to 15% of its mobile users with Yahoo powered search results (businessinsider). Combined with Yahoo’s battle for default search status on Safari for Apple devices, this could prove to be a defining moment in Yahoo’s future.

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