Bing-Yahoo: Seemed Like a Good Idea

January 31, 2011

Matt Rosoff at Business Insider looks at the results of the Bing- Yahoo union in “Bing Deal with Yahoo Isn’t Paying Off for Microsoft So Far.”

When Microsoft and Yahoo struck their ten- year deal in July ’09, expectations were high. Microsoft would control and process search information, and Yahoo would keep the lion’s share of the revenue. Also, Microsoft would collect user information which should have attracted enough advertisers to make the enterprise worthwhile.

However, the revenue has failed to meet those expectations. Data from the last quarter of 2010 show a 6 cent profit for every dollar Microsoft spent on customer acquisition. Ah, the best laid plans. . . .

Microsoft has not lost hope, however. As Rosoff explains:

“In the long run, Microsoft hopes that the combined market share of Bing and Yahoo will get more advertisers into the system, increasing cost-per-click. The extra data for all those new Yahoo users should also help Microsoft target its ads more effectively.”

We’ll see how that goes. When we run Web searches, we turn to such outfits as and Daily we think, “Hey, Facebook. Roll out that search engine.”

Cynthia Murrell January 31, 2011


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