Google, Bing, and Yahoo: The Search Engine Wars and Advertisers

News about any online phenomenon is close to obsolete as soon as it is
reported. This is especially true in reporting on the battle for
supremacy between search engine leaders Google, Bing, and Yahoo!.

It is not surprising that it’s hard to get relevant information on
what recent search market developments mean for the online advertising
and SEO community. The search algorithms of these search services are
updated daily; interactions between these companies are complex and
constantly shifting; proposed corporate partnerships involve anti-trust
issues and require the approval of a cautious government.

So, here’s a short history of the recent search engine battles, an overview of where things stand now, and what it might mean for advertisers and optimizers in the near future.

Recent Search Engine News

In February of 2008, Microsoft announces its proposal to acquire an uninterested Yahoo. Three months later, with Yahoo not making any movement toward the deal, Microsoft withdraws their proposal.

By September 2008, Google holds 62.9% of U.S. search market share, Yahoo! 20.2%, and Microsoft 8.5% (Comscore.com). A proposed deal between Google and a willing Yahoo! is almost universally opposed by news and advertising organizations, and was called off by Google when it was clear that both private and public anti-trust concerns were too great for the deal to advance.

Eight months later, in May of 2009, Microsoft announces the June transition of its Windows Live Search to Bing, its new “decision engine”. Bing, according to Microsoft, will be better suited to give people relevant information and aid in their decision-making. There is also an $100 million advertising campaign behind it, which might put a sizable dent in Google’s lead.
In July of 2009, the search engine market shares are basically the same as those from last September. Google’s market share has very slightly increased to 64.7%, Yahoo has dropped slightly to 19.3%, and Microsoft’s Bing is holding almost steady at 8.9% (comScore.com).

The Microsoft-Yahoo! Deal

On July 29th, Yahoo! and Microsoft announce a deal: Microsoft will power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ search advertisers. This deal, hot on the heels of Microsoft’s Bing announcement and push, leads people to speculate that the landscape of search could rapidly be changing.

Well, not so fast: The Microsoft – Yahoo! deal has to first be approved by the Department of Justice for the same anti-trust issues as the Yahoo! – Google proposal, and this could take months.

Also, the deal between Microsoft and Yahoo! is not as simple or cooperative as at first appears. On August 24th, the senior vice president of Yahoo! stated his company’s renewed intention to compete against both Google and Microsoft.

“We are not a version of Bing,” said Prabhakar Raghavan to reporters at the Yahoo! headquarters. “We are Yahoo and that will continue…We collaborate on the back-end but we are competitors on the front-end,” he said.

This sounds like a very confusing relationship, and they have only just started dating.

What Does This Mean for Advertisers & SEO?

I’d recommend, in light of all the recent search news, to simply wait and see what happens. Nothing much has changed at the moment, except for the stated intention of the two parties. It’s too early to start categorizing how internet advertising and SEO has changed; the partnership is far from being a done deal, and even assuming it is approved, it may change substantially in the coming months.

There are a few things I’d recommend doing that are loosely based on this news, but they are things I’d recommend anyway. If you aren’t already advertising on Microsoft’s adCenter or Yahoo Search Marketing (YSM), I’d recommend trying them. The large ad campaign, news releases, and the greater awareness of Bing will mean increased traffic in the coming months. Yahoo! might also benefit from the additional press and attention.

It might be a good time to check out the costs-per-click(CPC) for your specific business campaign, and take advantage of the lower amount of competition compared to the crowded Google marketplace. If you advertise on Bing, search for coupons that can be used in their adCenter; there are many promotional deals circulating at the moment.

Despite the fact that Google still has an overwhelming lead, a current combined market share of 28% for Yahoo! and Bing is still a lot of searches. Based on the July total of 13.6 billion search queries (based on comScore stats for U.S.), that’s 3.8 billion searches in one month. If you’re not swayed by the numbers alone, acquainting yourself with the paid ad structures of these companies will mean you’re one step ahead of the game if those engines increase greatly in popularity.

There is also a report from Microsoft that conversion rates for Bing are greater than those of Google. An independent report from advertising network Chitika, released in July, also supports this, showing that people who land on sites using organic searches via Bing are 55% more likely to click on an advertisement, compared with users of Google.

In my opinion, though, this should be taken with a grain of salt; Bing is new, and any reports on the initial actions of users could be chalked up to mere exploration-clicking. Again, only time will tell how powerful these trends will be.

As for SEO concerns, the algorithms of the top three search engines are too much in flux to advocate a specific strategy other than the recommended current best practices. Google is currently in the beta testing stages of its soon-to-be-released ‘Caffeine’ search engine (which will operate “underneath-the-hood” and probably go unnoticed by most.) Bing is getting the kinks out of its programming, and will probably be undergoing a lot of change in the next few months.

You can find a lot of current information on the differences between all three engines’ search results if you look. (Google has a preference for exact keyword matches , whereas Bing and Yahoo! favor keyword matches in the domain and subdomain URLs. Also, Bing is cutting out a lot of clutter, returning a slim fraction of the search results as the other two.) My point is that the companies will all be undergoing such massive flux in the next few months that it doesn’t make sense to change your SEO strategies based on factors that might be very temporary.

I believe that barring some competitive vertical search engines (search engines that are focused on a specific industry or specialty) that might change the playing field, it is unlikely that general SEO practices will be significantly altered in the near future. Once the search engines become more genuinely differentiated, and it is obvious they will stay that way, then would be the time to study the different methods of optimizing for their specific algorithms.

I’d recommend keeping up-to-date on the news releases that come out regarding the search engines. I do this by searching for ‘bing yahoo google’ and, in advanced options, changing the search function to be the most recent results. If you want steady updates, you can also set up Google Alerts, which will send you daily or as-it-happens news on the subject of your choice. These are good strategies with which to stay in the loop, and it will ensure that you’re prepared for any big developments. For more specific details on search traffic, check comScore.com for the latest statistics.

The search engine war is definitely heating up, but bear in mind that Google is still far in the lead, and will be for quite some time. It’s going to be hard to dislodge a market awareness so extensive that ‘Googling’ has entered the national lexicon. Keep the most up-to-date facts in mind when contemplating revamping your advertising strategies, and don’t pay heed to excitement that ignores the bigger picture.

Thanks to Z. Elwood for this interesting insight into the new search engine wars.

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