Yahoo, Bing Partnership Not Delivering Results

Internet traffic rankings company comScore just delivered its search share data for March. While Google and Bing are up slightly, Yahoo is down. Worse, Bing seems to have gained most of its market share from Yahoo. What does this mean for the future of the Yahoo-Bing partnership?

Let’s take a look at the numbers. For the first quarter of 2011, Microsoft’s Bing gained nearly two percentage points of search market share over the previous quarter; it went from 11.8 percent in the last quarter of 2010 to 13.6 percent in the first three months of 2011. Yahoo, on the other hand, lost about a third of a percentage point during the same period, going from 16.3 percent to 16 percent. The rest of Bing’s gain in market share appears to come from AOL.

That may not sound so bad, but sometimes perceptions matter more than the actual numbers. Kara Swisher at All Things Digital noted that an unnamed source close to Yahoo’s search situation notes that it has “fallen off the cliff.” Apparently, Microsoft’s new system, which is supposed to be delivering better results for Yahoo, isn’t working as intended – not yet, at least. Some question whether it ever will deliver those results.

It’s not all doom and gloom for Yahoo. The company’s display ad business has been showing a strong recovery. And while there is still some uncertainty as to what will happen with Yahoo’s Asian assets, negotiations are moving forward on some fronts, with several options being considered. Some of the plans could bag the venerable search firm a fair bit of cash; what Yahoo will choose to do with it is another question.

Speaking of money, Yahoo’s partnership with Microsoft calls for the software giant to cover its partner’s dip in revenues due to its drop in search market share. That’s somewhat  good news for Yahoo, but it’s something that neither partner likely wants to see continue. It’s too early to say that this partnership will not work out, however. Indeed, Jay Yarrow at Business Insider cites sources at both companies as saying that they’re still early in the integration process, and it’s not really expected to take off until the middle of this year. No doubt the comScore figures for next quarter for both Yahoo and Bing will deserve closer scrutiny.

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