The Yahoo and Microsoft Merge Good or Bad?

Katherine Bennett - August 3, 2009

The much anticipated search engine merger of the year was announced earlier this week. According to Computer World, and others, Yahoo and Microsoft will officially join forces in the search engine world. According, to PC Pro, Microsoft’s Ballmer says, “The ten-year deal will see Microsoft’s Bing put to work powering Yahoo’s searches. In return, Yahoo will take over selling premium advertising for the two companies, with a revenue-sharing deal in place.” What does this mean for advertisers? There are pro’s and con’s depending on how it pans out.

Let look at the pro’s first. The merger between Yahoo and Microsoft should spur creativity and innovations. Both search engines have experience with search and display advertising; now they can collaborate on new ideas and thoughts on improving search engine advertising options.

Speaking of improvement, it might affect cpc bidding for the better. If Yahoo is going to be reaching more people, then advertisers might start migrating more of their advertising budgets to Yahoo. If that happens, cpc’s in Google could ultimately drop, especially since Google claims that part of ad ranking depends on your competitor’s cpc bid. It would definitely be a win for certain industries that currently have to bid significant dollars in Google for a keyword, in order to get first page ranking.

On the contrary, cpc’s could increase since there will only be two major players competing. It could change to “here’s the cpc price” take it or leave it. This would drive businesses with smaller budgets to look for cheaper ways to advertise online, whether they advertise on more niche search engines or look more seriously at the social media avenues of advertisement.

Time will tell whether this search engine partnership will be a success for all or only for some. I’m hoping it’ll be a success for all, especially for search engine advertisers. It should be interesting to see how Google responds to the Yahoo and Microsoft announcement.