No doubt, Google’s domination in search engine business has put their competitors to think of how to stop it. According to Hitwise data , Google’s market share is more than 71%. One of ways to stop the domination is dealing between Microsoft and Yahoo. After postponed due to regulatory approval since summer 2009, finally regulators in the U.S. and European approved the join search businesses of Microsoft Corp. and Yahoo Inc. However, this join business will significantly heat up the search engine business competition.
Microsoft and Yahoo (both major Google’s rivals in multiple businesses) announced that both the U.S. Department of Justice and the European Commission have approved an agreement between the two firms to have Microsoft's Bing search engine power Yahoo's sites. The companies disclosed that a joint engineering team will begin adapting Bing for the Yahoo site "in the coming days" and that they hope the engine is added to the Yahoo site, at least the United States, by the end of this year.
The partnership, which includes Yahoo selling premium search advertising services for both companies, is a direct attack on rival Google, which has long dominated the search market. Google spokesman Adam Kovacevich said "There has always been robust competition in our industry, which keeps us on our toes and benefits users," wrote Kovacevich. "We compete against a number of alternatives, including traditional search engines, vertical search sites, social networks, and other forms of online and offline advertising."
"I think that this will ramp up both competition and innovation. Yahoo and Microsoft now have one common enemy -- Google. And they will devote all of their energies toward making their search a more attractive option both for users and advertisers," said Dan Olds, an analyst at Gabriel Consulting Group. While most analysts agreed that the Microsoft-Yahoo search plan doesn't present a short term problem for Google, Olds said the search giant should keep a close eye on on their longer-term actions.
"Google's the leader in search, just like Microsoft's the leader in operating systems and PC applications," Ezra Gottheil, an analyst at Technology Business Research said. "Knocking off the leader is difficult. It's not like Microsoft has been underspending on search. Bing needs to be significantly better to grow faster." Allen Weiner, an analyst with Gartner, Inc., doesn't expect the Microsoft-Yahoo combination will cause any panic withing Google's walls. "Is Google worried? Not in any way, shape or form," said Weiner. "It's a company that's not short on hubris. Even if they have any minor degree of anxiety, I think they're in the don't-let-them-see-you-sweat mode. I don't think they're motivated by a lot of externality."
Sources:
1. Computer World
2. Hitwise
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