HUA HIN, Thailand - Following a long hot-and-cold courtship initiated in
February last year Microsoft and Yahoo have finally got it together. A 10-year
partnership plan announced this week involves a deal whereby Microsoft gets
access to Yahoo's search technology to use in conjunction with Microsoft's own
recently launched search engine, Bing. Yahoo will use Microsoft's technology
and management skills to increase online advertising revenue together with its
new partner.
The target is Google, its 65% search market share in the United States and its
current near monopoly on Internet advertising
revenue. The partnership is great news for advertisers and publishers, who have
long been seeking an alternative to Google. Even so, the combined forces of
Microsoft and Yahoo will still not be enough to topple Google, whose name has
become synonymous with web search. At present the partners have between 25% and
30% market share in the US, and are looking to at the very least to consolidate
that hold, but that will not make them a clear threat to the Google juggernaut.
Yahoo's own search service will be replaced with Microsoft's Bing. It will sell
advertising that runs alongside the search results, which will benefit both
companies. Microsoft has agreed to pay Yahoo through a revenue-sharing
agreement based upon traffic generated on Yahoo's network of websites.
The ad serving technology will be Microsoft's adCenter, which up until now has
been largely ignored by advertisers as Google could always do better and
provide more traffic. This is a trend that Yahoo and Microsoft would like to
see changed. A viable alternative to Google is also not a bad thing for
consumers, and it may loosen the company's vice-like grip on the Internet.
Yahoo shares fell 12% on Wednesday to US$15.14 as Microsoft shares rose 1% to
$23.80, following the announcement. Some investors were disappointed that there
was no cash payment from the software company, though Yahoo chief executive
Carol Bartz remained optimistic. "With one player dominating 70% of search,
that field has been pretty lopsided. This transaction will create a healthy
competitor that'll keep everyone on their toes," she said.
Yahoo estimates that the deal with Microsoft will boost its operating profit by
$500 million a year. It also could save about $275 million in capital
expenditures now that it will be using Microsoft's search technology instead of
continuing to develop its own.
Google's response to the new competition was predictable as vice president of
search and user experience, Marissa Mayer, stated: "If Yahoo adopts Microsoft's
Bing search engine in place of its own, it will reduce the search market from
three major players to two."
Naturally she did not mention the fact that Bing is a new player on the scene
and Google has been trouncing any competition in this field for years.
Bing is the key here and it is the likely catalyst for the agreement between
the two companies. When Microsoft replaced Live Search with Bing early last
month it made some early ground in the search market largely at the expense of
Yahoo. Bartz has acknowledged this and has finally warmed to Microsoft, stating
that they should be given kudos for Bing.
If the new search engine can actually offer better and more relevant results
than Google then it has a chance. It seems that Google's algorithms are due for
an overhaul and are definitely in need of some healthy competition, a
disproportionate number of search results lately have simply been turning up
huge conglomerate websites such as Amazon and Wikipedia as opposed to the info
that users are really seeking.
The new duo have a lot of work ahead of them but two heads are better than one
and both companies have a lot of technology to bring to the table. Anything
that stops one company slowly consuming the entire market can't be bad, even if
it does involve Microsoft!
Browsers
Mozilla is rapidly approaching a billion downloads for its popular Firefox web
browser. The target is likely to be reached today, July 31, as the counter on
its website ticks
onwards and upwards. This milestone figure includes all versions of the browser
since its initial release in 2004 - although it does not mean that a billion
people are using Firefox; the ticking total includes multiple downloads by the
same user and updates to existing versions.
The perky browser has done remarkably well since its launch at a time when more
than 90% of the global market was dominated by Microsoft's Internet Explorer
(IE). Since then, IE has dropped to below 60% market share, while Firefox
rapidly approaches 30%. The Mozilla product is stronger in Europe with almost a
40% share but a little slower on the uptake in Asia where its market share is
around 23%.
Mozilla will launch a new website on Monday, at www.onebillionplusyou.com,
where the creators of Firefox will provide more information on the achievement.
Martin J Young is an Asia Times Online correspondent based in Thailand.
(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please
contact us about
sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
Browsers
