Senior vice president of Microsoft’s online audience business, Yusuf Mehdi, says that Bing will be a credible number two search engine, once the Yahoo-Bing deal is closed.
Mehdi, in an interview with Reuters, said he expects the search engine to grow into profitability by growing share confidence.
According to the numbers, Microsoft (which currently holds about 10 percent of the search market) should be able to gain a hold on 30 percent of the search market when it joins forces with Yahoo (which holds just under 20 percent of the search market). Mehdi explains that this 30 percent carries a lot of weight in the marketplace, and expects to get more advertisers willing to put down the cash for a chance to target one-third of the market. The deal, according to Microsoft’s executives, should receive regulatory approval early this year.
To gain a third of the market could mean big business for Microsoft. Google has reported its annual revenue to be more than $23 billion, and this number is only expected to grow. During the last quarter, Microsoft reported that its search ad sales were up, while its display ad sales were down. The company’s revenue increased by 14 percent from last year, up to $19 billion – this was significantly better than what analysts had expected. However, Bing’s growth didn’t seem to have contributed much to the company’s online services performance.
Mehdi said that the most important factor for Microsoft to move into profit would be “getting the scale,” explaining that they were eventually going to have to “grow against Google.” Google has actually increased its market share 0.7 percent since Bing’s launch last year. Mehdi admits that his company is “outmanned and outgunned” by Google.
He also mentioned that there were no plans for Microsoft to sell MSN, saying that Bing and MSN have great synergy.
Bing has also been in talks of late with Apple about Bing becoming the default search engine on the iPhone. This could mean that Bing might gain half of Google’s hold on the iPhone search market (as it stands, Google holds over 50 percent of the iPhone search market) according to a study by Chitika Research. Either that, or, the article suspects, Apple could have a lot of angry Google-addicted customers on its hands. Microsoft is, more than likely, hoping for the former result.
Kaila Krayewski is a freelance journalist with a passion for all things internet. Having worked for nearly two years as the public relations manager for an internation search engine optimization company, and publishing hundreds of articles (how-to, informational, and otherwise) on SEO, she knows a thing or two about the field. Furthermore, having just started up her own website blondetraveler.com, she is doing her best to keep one step ahead of the search engines in order to keep the traffic flowing.
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Tags: Bing, Microsoft, microsoft search market, Yahoo
