Gauson

Finally after months of speculation, Microsoft and Yahoo! have decided to join forces and form a partnership in Internet search and advertising that primarily aims to take on market leader Google’s search engine dominance.

The merger will include Yahoo! selling pay-per-click advertising on both Microsoft and Yahoo! websites which they hope will increase revenues as there will no longer be competition between each other. But Yahoo! will keep 88 percent of the revenue. The merger will add to Yahoo!’s earnings of around $275 million extra a year plus there will be a substantial drop in its investment in technology development and this merger will last for a whopping 10 years.

However, Yahoo! had made two critical mistakes. Around June 2000, it replaced Inktomi’s search engine with Google and actually paid Google to put their results on the Yahoo! website. Users loved Google’s search engine and decided to use Google directly rather than Yahoo!. Just last year, Yahoo! made another crucial mistake to reject Microsoft’s 46.6 billion proposal last year. It shows how two simple decisions can completely affect the route of a company and the overall market.

So why did Microsoft acquire Yahoo!? The answer is online advertising. This merger means more competition to the online advertising and search engine market. Microsoft is anticipating that a long-term merger with Yahoo! will give it the magnitude and understanding it needs to attract more users, advertisers and ultimately more revenue.

Even though the Microsoft-Yahoo! merger has increased their market share to a total of 28 percent in the United States alone, Google still holds the majority of it by having 65 percent of the market share, and it will be a tough fight for Microsoft-Yahoo! to try and persuade dedicated Google users away from their favourite search engine.

When it comes to improving its search advertising system, Google has the upper hand on both Microsoft and Yahoo! base on what works and what does not. Google takes note of numerous factors to find out how likely it is for a user to click on an advertisement. True, Microsoft does have brilliant computer scientists working on the same dilemma, however Google’s lead in front is staggering and Microsoft’s dedication to search is pale in comparison to its cash cows like Windows and Office.

Users love Google as it is just plain search engine and compared with the other search engines there is just too much clutter. What users want is an easy to use, find and remember search engine that is accurate in its results when they type in their searches.

Microsoft will prove to be a challenge though for two reasons. Firstly, it has plenty of cash to spend on online advertising and search engine technology and secondly future growth of the company depends on this merger.

Microsoft’s new search engine Bing has started to grab market share and with the merger of Microsoft and Yahoo!, this will effectively replace Yahoo!’s search engine on the Yahoo! website. The advantage of using Bing is the fact that it allows users to purchase book travel, goods and discover credible health data easily. Users can use Bing for shopping and the site provides users with an Amazon-like experience. Although some analysts say this is less likely to attract fans of Google’s search engine but may attract those who use Yahoo!’s search engine.

On the other hand, Yahoo!’s strengths can be seen through its bigger market share which directly means that it has more relationships with advertisers than Microsoft does. Yahoo! has also been working on a tight budget for some time and its technology has become stagnant as has its ability to update it. Though Yahoo! investors might be disappointed with the merger, the cost of trying to catch up with Google and Microsoft would be substantial and it would not stand a chance in the Microsoft Google war.

There is still a long road ahead for Microsoft-Yahoo! to even take some of the lead from Google. But no doubt, competition does drive companies to improve their products/services. For some time now Google has been the only major player in the search engine industry and a Microsoft-Yahoo! combination will create a search engine that will certainly pose a bit of a threat to Google. Time can only tell how users will respond to new avenues of search.

Microsoft’s new search engine called Bing has been launched too early in my opinion. It has long way to go before it can even be considered as a serious search engine or even compete with Google. Bing has some serious problem with the search results if it cannot find a website’s url when the website has already been indexed.

To test the Bing search engine when it was launched in the beta phase I searched for Gauson.com in the search box. I knew that Microsoft’s Live search had some problem with finding the exact url address of some websites. Now that the Bing is no longer in beta phase the problem still persists. Microsoft may have changed the packaging and made few improvements but the verdict is that Bing needs many more changes in order to provide good relevant search results.

Microsoft may want to take few notes from Google where webmasters have control over the way the search engine indexes the website.

There’s obviously a big hype about Twitter and it has been promoted in media and blogs around the world making it one of the hottest topics in the blogging and social media platforms. No doubt when it comes to micro-blogging, the first word that springs to mind is Twitter. Many people would agree it is a nice marketing tool for blogs and other advertising agencies as well as for building an online buzz.

I was in a recent group meeting with a few colleagues and we were discussing how to maximize traffic and we were discussing if Twitter could help. As much as we would have loved it if Twitter could get us more backlinks or drive traffic like social bookmarking sites, it isn’t that kind of service. With Twitter‘s 140 characters limit it makes it a little difficult. But it will not be ruled out as one of Twitter‘s strengths, if used in the right way is networking and communicating with individuals or businesses that we might not otherwise be able to reach.

Facebook on the other hand has more emphasis on profound connections with others compared to who has the most connections.

It’s a little ironic you meet new people on Twitter and then when you lose touch of them you find them using Facebook.

Though what is all the hype about Twitter?

It is not hot off the press that Google is thinking of buying over Twitter. As usual there is a hype about Google buying something new on the market. What Google wants from this micro-blogging service is more likely a blend of technology, information and a testing framework.

Tweet Me Not … If the first thing you do when you wake up in the morning to the last thing you do at night is check your Twitter account, you are indeed a Twitterholic. So here are a few alternatives to taking a break from it:

• Phoning your friends or sending text messages
• Making calls using Skype
• Visiting chat groups eg. Yahoo and AOL
• Socialize at meetings or functions/events
• Meet new people at parties/ clubs

Yes, there is nothing wrong with tweeting, but it’s always good to take a breather from the online world and socialize with those to physically meet and greet with them.