Microsoft Bing may cripple Yahoo's recovery

Before you go, we thought you'd like these...
Before you go close icon

When Microsoft (MSFT) launched its new Bing search product, Yahoo! (YHOO) chief Carol Bartz yawned and said any interest in the product would be short-lived.

By all accounts, she should have been correct. Microsoft had been losing search share and dropped to about 8 percent of the market. Yahoo! has closer to 20 percent.

Microsoft has been chasing Yahoo! for close to two years in an attempt to find any reasonable way to combine the search operations of the two companies to attack market leader Google (GOOG).

Comscore, the internet audience research firm released data yesterday that shows Bing is picking up market share. It is picking it up fast -- and so far, it is holding it. Comscore reported, "Microsoft Sites' average daily penetration among U.S. searchers reached 16.7 percent during the work week of June 8-12." It was closer to 12 percent two weeks ago.

What Comscore did not say is who is losing that share -- Yahoo! or Google. Google enjoys such extraordinary loyalty among its users that Yahoo! may be the victim.

Yahoo! shareholders may be getting nervous. A week ago, the stock traded at $16.64. It is down to $15.60.

Yahoo! has held off on serious consideration of putting together its search business with Microsoft's. Perhaps Bartz thought she could get a better deal when Bing launched and did poorly. Perhaps she thinks her company can indeed got it alone and still sharply increase revenue and earnings.

Bartz is wrong and Yahoo! shareholders are about to pay for it.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Read Full Story

Markets

S&P 500 2,191.95 0.87 0.04%
DJIA 19,170.42 -21.51 -0.11%
NASDAQ 5,255.65 4.55 0.09%
DAX 10,513.35 -20.70 -0.20%
HANG SENG 22,564.82 -313.41 -1.37%
NIKKEI 225 18,426.08 -87.04 -0.47%
USD (per EUR) 1.07 0.00 0.06%
USD (per CHF) 1.01 0.00 -0.01%
JPY (per USD) 113.48 -0.41 -0.36%
GBP (per USD) 1.27 0.01 1.16%

From Our Partners