What The Microsoft-Yahoo Deal means for Search Advertisers

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Finally, Microsoft and Yahoo came to an agreement and this can literally change the landscape for us PPC advertisers (and SEO). How will deal impact pay-per-click advertising you ask?

For many years Google has dominated search market share with over 60% of all searches. Whenever a small business thinks of paid search, Google is where everyone wants to be, why? It’s simple. It’s called Market share. The only way we’ll see real results from a campaign is to make sure we generate the traffic possible to see adequate conversions of either sales or leads.

First of all, let’s understand why it was so important for Microsoft and Yahoo to reach a search deal. Basically both companies have been competing with Google for years and as much as they have tried to make their search technology competitive, Google has dominated market share leaving both engines trying to climb a very steep and high mountain. As Microsoft has already spent a countless amount of money on their search technology, now releasing Bing, that was the final straw for Yahoo to decide on just focusing on what they do best, create content for their users.

This deal means all search results, both organic and paid, will be delivered through Microsoft’s search technology. Yahoo will no longer be dedicated or spend resources on search technology but rather on building more “properties” around the net which brings in millions of daily users in the categories of sports, finance, and many others.

When searching Yahoo, in early to mid 2010, you will the search results will be “powered by Bing.” Users will not be directed to Bing of course, it just means Bing will power all search results for Yahoo, again, and including both paid and organic results, which also includes content network ads, which for now, Google has one of the largest content networks with its Adsense platform which attracted millions of webmasters to monetize their websites.

So, what does this all mean for paid search advertisers? Paid search advertisers focus on one engine, and that is Google. Although Yahoo and Bing are 1st tier search engines, my clients, including myself, allocate most of our paid search budget to Google as I’m sure that is the case for most. This deal will finally meet competition for Google. Bing and Google will now both compete for market share although it will be a while until Bing can come close but considering who Microsoft is, it’s a challenge they are up for and are proving it by this acquisition.

Advertising through the MSN platform once all search is powered by Bing to Yahoo, market share will double as both engines will become one. Not only will your ads be shown in both Bing and Yahoo, but as both Bing powers all of Yahoos content, your option to choose to include your ads in the content network will mean your ad will be shown in all of MSN and Yahoo properties.

When it’s all said and done, the market share of Bing will grow tremendously compared to what it is now and though I predict PPC bids will rise due because of competition growing due to rising market share, this will benefit paid search advertisers as we can’t only depend on rely on one major engine to advertise.

Both MSN and Yahoo platforms, in my experience, have been more lenient when it comes to affiliate marketing and also quality score which really impacts campaigns in Google. This change can impact the landscape of PPC for affiliates if Bing stays within its current guidelines. We all know Bing is not as strict with quality score as Google is but that can also change as Microsoft tries to improve not only their organic algorithm but paid search.

We’ll see many changes occur in the next couple of months and we can only hope this will be a positive for paid search advertising.

Pablo Palatnik
Pablo Palatnik is the author of the blog PalatnikFactor, focusing on all things Online Marketing and Search Engine Optimization specialist for Fortune3, a shopping cart... Read Full Bio
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  • Ronald Sayegh

    If bing would offer new advertisers a good deal to signup quickly (e.g guarantee of <1$ PPC for the first 10000000 advertisers for 1 year or a similar promotion – just an idea :P) with big TV ads then they would easily be able to win a nice share of the market in no time! Now would be the perfect season to pour the max marketing budget for this purpose. People are anyway getting tired of hearing and seeing Google all over the place, and the cheap sneak ads within movies and siries when famous actors use the term Google just makes one think that it can’t be right that one monopoly wants to rule the internet.

  • Sewer Repair

    We are looking forward to this merger, like that Bing is incorporating twitter into search too….

  • promosyon

    We are looking forward to this merger, like that Bing is incorporating twitter into search too….

  • Hector Cuevas

    yea.. let’s hope this is a good thing.. – the Bing Twitter search sounds cool..

  • ms danielle

    in regards to ppc, would have liked to see google license out its adwords engine to MS and Y!, kind of like how Toyota licenses its hybrid technology to Ford. but that wouldn’t happen…

  • Joel Gross

    Great insight Pablo. I agree with you that Microsoft is up for the challenge, and I believe that eventually (not anytime soon however) they have a shot at catching up with Google. Realistically how much time do you think SEO’s should begin to focus on Bing/Yahoo right now?

  • Pablo Palatnik

    Hi Joel,

    Funny you ask that question, I just did an interview with John Carcutt and I asked him this question.

    Q: How do you see this Bing/Yahoo deal playing out for SEOs? Any serious implications or changes?

    This is going to depend tremendously on how the integration is actually handled. How much control will Yahoo retain over the actual SERPs. What type and how much data is Bing going to send over to Yahoo. We just don’t know yet. For all we know, Bing could just be the data center and Yahoo would continue to apply its own algorithm to that data. We just don’t know.

    The two big questions I have are … What happens to paid inclusion and are we going to lose Site Explorer? It will be interesting to see.

    You can read the full interview at: http://palatnikfactor.com/2009/08/06/10-questions-on-seo-with-john-carcutt-from-mediawhiz/