Late word from Barron’s is that Panama is working well, at least according to a study from RBC Capital. Click-through rates on search ads have improved significantly, but the most important part of the survey may be this: Yahoo’s share of of search-related spending is up to 18.1% from 17%. Google (GOOG) has not lost share, but MSN (MSFT) and others have.
Microsoft has been fighting a losing battle in search, first against Yahoo! and later against Google. Search is considered "strategic" at Microsoft particularly now that it is delivering more of its products online through Microsoft Live. Customers for Windows may be using that as the OS, but are moving "out of system" for search. In essence, Microsoft is not delivering an integrated "live" product because so few people are using its search engine.
Several key Microsoft executives involved in search are leaving the company including Christopher Payne, who most recently served as vice president of Microsoft’s Windows Live Search group
Microsoft’s only solution for fixing the problem, short of buying Yahoo!, is to throw money at it. A lot of money. Its search service needs to work substantially better and needs to be marketed at the level that Windows and Office are. Otherwise, they might as well license Google.
For the time being, Microsoft is hardly treating the search business any better than they do the Zune multimedia player. Not exactly front burner.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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