February 24, 2010, 12:00 AM

Yahoo-Microsoft deal will make Bing more useful to marketers, expert says

Now that Yahoo and Microsoft have won regulatory approval to extend use of Microsoft’s Bing search engine to Yahoo sites, marketers will have the traffic volume they need to better manage a Bing campaign, search expert George Michie says.

With Yahoo Inc. and Microsoft Corp. having won regulatory approval to make Microsoft’s Bing the search engine on Yahoo sites, online marketers will finally get the traffic volume they need to effectively manage a Bing search campaign, search expert George Michie says.

“One of the hardest things of paid search is figuring how to set bids on low-traffic keywords, and the trouble with Bing has been that its traffic was too thin,” says Michie, who is CEO and co-founder of search marketing firm Rimm-Kaufmann Group. “Now with a significant increase in web traffic volume, marketers using Bing should be able to do a better job of modeling the keyword data.”

Last week, both the U.S. Department of Justice and the European Commission approved the agreement between Yahoo and Microsoft to make Microsoft’s Bing the search engine for Yahoo as well as Microsoft Internet properties. Clearance from the U.S. and the European Commission, which was required before Microsoft and Yahoo could proceed with their agreement, means that Bing likely will account for a search market share of about 28%, up from 11% in December.

Yahoo accounted for about 17% of the search market share. That will make it a more formidable competitor to Google Inc., whose December share was about 66%, according to web measurement firm comScore Inc. However, the transition to Bing on Yahoo sites will not take place before late 2010, and could be delayed until 2011, Yahoo and Microsoft say.

Those figures alone will make it more worthwhile for many marketers to initiate search advertising campaigns on, Michie says. “Some advertisers haven’t bothered to put their ads on Bing because it was the third engine and relatively small and it required all the work of managing Google but with a fraction of the traffic,” he says. “Now they’ll have just two big search engines to manage so it simplifies the workflow.”

Under the Yahoo-Microsoft agreement, which the two companies announced last July, they will now begin to transition Yahoo’s existing search engine and paid search platforms to Microsoft’s platform, while Yahoo becomes the exclusive sales force for both companies’ premium search advertisers globally, according to a joint statement by Yahoo and Microsoft.

Both Yahoo and Microsoft say the agreement will enable each company to help make Bing a more useful search marketing tool. “This breakthrough search alliance means Yahoo can focus even more on our own innovative search experience,” says Yahoo CEO Carol Bartz. “Yahoo gets to do what we do best: combine our science and technology with compelling content to build personally relevant online experiences for our users and customers.”

Adds Microsoft CEO Steve Ballmer: “Although we are just at the beginning of this process, we have reached an exciting milestone. I believe that together, Microsoft and Yahoo will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”

Michie notes that it remains to be seen how easy it will be for marketers who have been using Yahoo’s search engine to migrate their data to Bing, a process that firms like Rimm-Kaufmann support as part of their search marketing services.

“Advertisers without Bing/AdCenter accounts should open one up soon to become familiar with the system and get an understanding of the similarities and differences to Google AdWords,” says Kevin Lee, CEO of search marketing firm Didit.

Lee adds, however, that Microsoft and Yahoo still have a “major challenge integrating their technologies and search operations.”

Yahoo and Microsoft said in their joint statement last week that they will work with advertisers, web site publishers and software developers to make the transition to Bing “as efficient and seamless as possible,” adding: “The companies hope to make significant progress transitioning U.S. advertisers and publishers prior to the 2010 holiday season, but may wait until 2011 if they determine that the transition will be more effective after the holiday season.”

The Yahoo-Microsoft agreement has also been cleared by regulators in Australia, Brazil and Canada. Although Yahoo and Microsoft are continuing to work with regulators in Korea, Taiwan and Japan, the two companies say they expect to transition all global customers and partners by early 2012.

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