Microsoft (MSFT) May Have Passed Yahoo! (YHOO) For No.2 Search Slot

Microsoft (MSFT) has been fighting for years to be taken seriously in the online search engine business. It plans to have a strong foothold have been undermined with each new measurement of US search market share. Most research services show Google (GOOG) with about 65% of the market, Yahoo! (YHOO) with 20% and Microsoft with as little as 8%.

Redmond hopes its new Bing search engine change its bad fortune and based on new research the quality of Bing search results and size of the Microsoft marketing campaign may have worked.

Figures from StatCounter reported by Techcrunch show Bing’s share in the US as 16.28% yesterday. Yahoo!’s share dropped to 10.22%. Google’s figure was 71.47%.  StatCounter the activity of two million online surfers.

If the data is even close to true, the big question is why Microsoft’s visits have spiked and whether the spike is at least partially permanent. Yahoo! CEO Bartz said she expected some initial fascination with Bing, but her concern about the new product is so low that she believe that Yaho0! does not need Microsoft as a partner to give her company a brighter future. The market has assumed that Microsoft and Yahoo! would come to some agreement to merger their search business, a move that would save Yahoo! engineering  and R&D costs and improve the portal company’s revenue.

Whether Microsoft can keep even a modest part of its gain will obviously depend on what will in many case be the first and sometimes only impression people will have when the test it. It would not be out of the question if the world’s largest software company could come close to parity with Yahoo!. If so, the Yahoo! board will once again rue the day that they did not take a buy-out offer from Redmond or at least form a search alliance to challenge market leader Google.

An improvement in Microsoft’s position would send Yahoo! shares back to $10. Yahoo!’s shares are trading down.

Douglas A. McIntyre