The Microsoft and Yahoo merger isn’t a foregone issue. It’s been three and a half months since the two companies announced they had reached a “binding letter agreement” on their search deal but straightening out the full pact is taking the two sides longer than expected.
In a statement, Microsoft said the two companies remain dedicated to their arrangement and given the complex nature of the transaction, there remain some issues that need additional clarity and definitive details. Yahoo then released a statement saying both companies are optimistic that they will be able to close their deal by early 2010.
For the time being, Yahoo is concentrating mainly on their media sites most of which are No.1 in their categories. Sites such as Yahoo! Sports and Yahoo! Finance are very popular and attract millions of unique visitors on a monthly basis. Microsoft, on the other hand, is happy that it is finally getting what it wants which is an increased search market share to take on rival Google giving them the scale and resources to create and expand the future of search.
At the end of the year, Yahoo plans to end its paid inclusion program, formally called Search Submit Pro which is similar to pay-per-click, after having received complaints that having paid advertisements incorporated in organic search results could create biased results. Yahoo’s page inclusion program enabled users to pay for page inclusion but not page rank.
On the plus side, having reliable and guaranteed page inclusion enabled web developers to optimize their web pages for specific search results. Protests were made as Yahoo’s page inclusion program was trickling into traditional search engine optimization (SEO) practices that included keyword manipulation and pay-per-click advertisements. Most web developers believe the end to paid inclusion will kick-start pay-per-click advertisements and other online marketing businesses. Yahoo had chosen the final date at the end of the year to give their advertisers time to adjust to the changes.
Last month, Google and Microsoft grabbed larger pieces of U.S. search market share whereas Yahoo lost market share for the second month in a row. Analysts say Yahoo’s 18% search share was the lowest mark ever and that Yahoo must find a way to stabilize its share loss. Microsoft on the other hand, increased its market share for five straight months, boosted by its new Bing search engine and integration of Yahoo’s search technology.
With Yahoo out of the core search business with Bing handling the back-end of the project whereas Yahoo will take care of the front-end design, lots of users will expect Yahoo to focus even more on the content side of the business so it is undoubtedly true that Yahoo’s properties such as Yahoo! News and Media Group, Yahoo! Sports as well as Yahoo! Finance will get lots of investments and plenty of attention. Seeing as how Yahoo will be left in a vulnerable position as it stated it can no longer operate search by itself, I cannot help but wonder what will be Yahoo’s imminent future? But with passion and new creations to further develop search user experience, it is highly likely that Yahoo will carry on playing a significant part in all of this.
As Microsoft’s Bing takes over Yahoo search, web developers who saw a great deal of traffic from Yahoo will find it useful to optimize their own sites for Bing. With Bing utilizing Yahoo’s database of profiles, analytics and behavioral targeting, Microsoft is going to close the gap between itself and Google which in turn should aid in core search improvements and facilitate advances on their personalization front as well. It is exciting to know that search technology will continue to develop and converge with other digital arenas such as mobile, platform gaming and other interesting areas that we have yet to envision.
