Microsoft Corporation (NASDAQ:MSFT) reached an agreement with Yahoo! Inc. (NASDAQ:YHOO) about two years ago to allow Microsoft’s Bing search engine to be the power behind Yahoo’s search results. The deal involved Bing doing all of the indexing and cataloging of all the data that is available for search on the Internet, and Yahoo! would refine and customize the results.
Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer was working at Google Inc. (NASDAQ:GOOG) when that agreement was made. Since taking over at Yahoo last summer, Mayer has been evaluating her new company’s operations to try to turn around its fortunes. In her first interview with investors and analysts since taking over, she addressed this alliance with Microsoft Corporation (NASDAQ:MSFT) – and while she expresses some initial patience, she admits that she would like to start seeing some encroachment on Google Inc. (NASDAQ:GOOG) market share pretty soon, as the agreement is starting year three of a 10-year deal.
Google Inc. (NASDAQ:GOOG) has about 66 percent of the search market share worldwide, while Microsoft Corporation (NASDAQ:MSFT) has about 15 percent of the market and Yahoo! Inc. (NASDAQ:YHOO) about 12 percent. Mayer commented about the trend, in which it smmes that Microsoft and Yahoo! are trading market share rather than taking share from Google. Google’s market share is not much different from two years ago, while Bing and Yahoo! Search had heir market share numbers almost exactly reversed from where they are now.
“We have to make the alliance work well enough that we are gaining share from the market,” Mayer said at the Goldman Sachs Technology and Internet Conference in San Francisco. “We collectively want to grow share rather than just trade share with each other.”
What would you do to kick-start this alliance? Do you think this Microsoft Corporation (NASDAQ:MSFT)/Yahoo! Inc. (NASDAQ:YHOO) alliance will ultimately be successful for both companies? We’d like your thoughts in the comments section below.
DISCLOSURE: I won no positions in any stock mentioned.
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