Are Microsoft and Yahoo breaking up?

Are Microsoft and Yahoo breaking up?
Social media from cutout newspaper headlines pinned to a cork bulletin board

Back in the halcyon days of 2010, Microsoft and Yahoo signed up to a partnership. The main tenet of this search alliance was that Yahoo’s searches were to be powered by Microsoft. The search alliance was created to challenge Google’s dominance of the search engine market in a way that would benefit both Yahoo and Microsoft. However, after just over five years, it seems that the partnership may be in trouble.

The contract that Microsoft and Yahoo originally signed was intended to last for ten years, but it did allow for a renegotiation or exit after a period of only five years. As Yahoo aren’t entirely satisfied with the way the partnership has been working out, the five-year-mark negotiations that are currently taking place are proving incredibly tricky. In fact, the two companies have had to extend their deadline for the conclusion of the negotiations. The original deadline expired in February, but Microsoft and Yahoo have agreed to continue their talks until the end of April.

Over the past five years, the two companies’ combined share of the US search market has remained constant, never dropping below approximately 29% and never exceeding approximately 31%. However, these figures are slightly deceptive, because Microsoft’s share has actually grown. The problem is that it has done so at Yahoo’s expense. With this in mind, Yahoo’s reservations over the search alliance seem perfectly understandable.

But what would it mean for online marketers if the partnership broke up? While the negotiations are experiencing problems because of events in the US market, the consequences of a break-up would be global. The main consequence would be that Yahoo’s search engine and Microsoft’s Bing search engine would drastically diverge. At present, because both engines are powered by Microsoft technology, their search algorithms and behaviours are fairly similar. If the search alliance were to come to an end, Yahoo would have to recreate its search engine from the ground up. In practice, this would mean that the SEO strategies that work well for Bing might no longer be effective for Yahoo, so online marketers would have to rethink and diversify their strategies.

A full-scale break-up of the partnership is unlikely as both Yahoo and Microsoft still have the potential to benefit from it. However, change is possible and online marketers need to be prepared to adapt to potential changes in at least one search engine.