Hashing Out the Pros and Cons of the Microsoft-Yahoo Merger

google-vs-bing-yahooThere was big news Wednesday morning that sent ripples throughout the SEO world. If you haven’t heard yet, on July 29, the Associated Press reported that Microsoft Corp and Yahoo Inc. finally merged.

Now, there are a lot of details and some obstacles facing this Microsoft-Yahoo deal. But if and/or when it happens, will it matter? How will that change the industry? What are the pros and cons of the eventual combination of Yahoo, Bing and the power behind Microsoft?

We’ve brought two of our SEO specialists together, mano-a-mano, to hash out the consequences of the eventual formation of a super-powered team that may or may not be able to bring down the vaunted Google, if even a little bit.

PROS:

First up, Albert Mitchell: Competition Will Make All Search Engines Better

Let me start with presenting a couple of facts:

  • As of May, 2008, Google controlled about 60 percent of all the searches performed online.
  • In comparison, Yahoo had a total of 17 percent.
  • AOL/MSN/Live (the congregate of what is now called Bing) taking an additional 17 percent.
  • Currently Google has no real competition to speak of in the search engine market.
  • Since the formation of Bing, Microsoft has invested truckloads of money in research, development and marketing.

Now, here’s why it would be good for Yahoo and Bing to combine:

  1. Competition drives companies to improve. Google has been the major market player in the search engine industry for many years. Once Yahoo and MSN got behind, they couldn’t catch up. A Yahoo-Bing combination will create a search engine that finally has a large enough market share (about 30 percent) to actually pose a threat to Google.
  2. Cooperative work improves end results. I actually use Yahoo instead of Google for many projects, simply because I felt it gave me better results. When MSN and Live combined to form Bing, there were very few changes made to the back end. Bing still uses MSNBot and it seems to be using about the same algorithms. When Bing and Yahoo combine, Yahoo’s genius will be able to be applied to Bing. This will result in a stronger search engine better able to compete with Google.
  3. Cost. Microsoft is a company with lots of money. Yahoo will increase its annual operating cost by as much as $500 million.  With the merger, $200 million of that will be saved directly because they will be no longer pumping money into their existing search engine. In the past few decades, both of these firms have pumped $billions into their search engines and kept losing a share of the market. This merger will enable these search engines to finally have a chance to actually compete and make a better profit on their money.

This move does not seem like it will change too much on the SEO front. If a person is applying best practices then rankings will improve in all search engines. This merger will change the emphasis we place on Yahoo and Bing and we will need to learn more about how Bing works and how we can get better results working with their tools.

CONS:

Dustin Williams: Two Bad Search Engines Will Not Create One Good One

Since the first attempt Microsoft made to acquire Yahoo, I have always felt that it would be a bad move for them to combine forces to try to compete with Google.

Think about it. How can they possibly believe that combining two bad search engines will make one good one? It wasn’t that long ago that MSN search results were powered by Yahoo. Then Microsoft developed its own search engine algorithm to break away from Yahoo, which forced them to compete with both search engines.

What could they be thinking by joining forces again and powering their search results from Microsoft’s new project called “Bing?”

I don’t think Google has a lot to worry about. Combining forces may give Yahoo/Bing more of the market share by combining their market share. But the merger is not going to instantly make Google users switch over. There is still a lot of work needed to develop a way to control search engine spam to the ability that Google possesses.

Ask.com could be the beneficiary of this whole thing. The Microsoft-Yahoo merger could backfire, causing Yahoo search users to lose confidence in its ability to produce relevant results. Those customers will either switch to other search engines like Ask.com – or just switch to Google and give Google even more of the market share.

Either this Microsoft-Yahoo merger will work, or it won’t. If it does then businesses and SEO experts will be forced to figure out the new Bing-Yahoo search engine. If it doesn’t work, then there will be one less search engine to worry about.

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5 Comments

  1. Varun R says

    This deal seems more of gaining profits through cutting down operating costs and increasing market share.Only when Microsoft changes some aspects of the algorithm that runs Bing – especially the focus on keyword domain names and prevent link spamming, then we will have to watch out. Until then Google does not have to worry….but this is indeed an interesting move.

  2. Ben Treanor says

    AOL Search is actually powered by Google, and not a part of the proposed Yahoo-Bing partnership.

    Of course, AOL represents little more than an asterisk in this conversation anyway! I’m looking forward to seeing how this all works out.

  3. Ronald Redito says

    Google is no doubt the number 1 search engine in the world today. Because of this Yahoo and MSN have tried their best to beat the Big G for several years. And now, their solution is merger. There will be a big impact but I guess they will need more efforts because I think their combined market share is still less than Google’s.

  4. Dustin Armstrong says

    I agree with Dustin, although I do think that it could be a good fiscal move for bing and yahoo. Yahoo can concentrate on the things that they do well like webmail and other things like yahoo answers and bing can actually create a better search engine and not just throw money into marketing a new name.

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