Microsoft and Yahoo Connect - What It Means for Your Business

If you haven’t heard by now (I’m sure you have), Microsoft and Yahoo recently entered into a 10-year agreement where Microsoft will be the technology that runs Yahoo’s Search, and will in turn pay Yahoo. This pact gives both a much stronger footing against Google, and together they should prove to be a formidable competitor for the Search giant. But more importantly, what does the new partnership mean for advertisers, specifically small to medium sized advertisers?

1. Competition – With this new large competitor in the Search field, everyone is going to need to spend more money to innovate. The status quo will no longer work. Google, above all, will need to increase its research and development to stay ahead of the curve.  With the signing of the Microsoft/Yahoo deal there should also be more revenue for Microsoft to invest in Bing to make it better. And let’s not forget about the Tier 2 Search Engines—they too are going to have to compete that much harder. In the end, competition breeds innovation and the field just got a lot more competitive.
2. Budgets – Prior to the Microsoft/Yahoo deal, if you were working with a small budget you would probably focus solely on Google, and possibly spread a bit to Yahoo. It usually wouldn’t make sense to run on both, because you would have spread your budget so thin that you wouldn’t get scale anywhere, and since Yahoo and Bing had limited scale compared to Google, you would focus on just Google. Now you’re going to have the benefit of reaching the majority of the Search population through only two Search Engines. With this ability to reach so many, while spending your budget across just these two Engines, you will have a better opportunity to test—which is the best opportunity for your business.
3. Scale – Finally, this partnership provides another Search Engine where you will be able to find reasonable scale. Unlike before, where Google owned the arena and everyone else was just a small player, now there is another Engine where you can attain scale. You don’t need to solely rely on Google. The advantages of this are as mentioned above, but are worth repeating.

To summarize, I think from an advertiser perspective this partnership is a very good thing and will allow you to broaden your reach. It will increase competition, give you more ability to test and ultimately help you to drive positive ROI for your business. “Microhoo” will not unseat Google yet, but as a result of this pairing the landscape should alter—and if Bing continues to impress, we may just have a real competitive marketplace. Oh, but wait… it still needs to get approval from the government!

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