Microsoft-Yahoo search alliance bearing fruit

Industry report shows gains for duo in paid search impressions and clicks

This week we got our first glimpse at how well the Microsoft-Yahoo search advertising alliance is performing and while the gains are small, the numbers are at least heading in the right direction. Marin Software, a search marketing services firm, reported Wednesday that the combined Microsoft Bing-Yahoo Search partnership saw its share of paid search impressions increase to 23 percent from 19 percent and its share of paid clicks rise to 21 percent from 19 percent in the four months ended Dec. 15, 2010. To be sure, Microsoft and Yahoo have much more catching up to do as Google’s share of the paid search market also grew to 82 percent from 81 percent.

Still, according to a Dow Jones Newswire report, Marin considers the impressions and clicks metrics important indicators that Microsoft-Yahoo together are getting some advertisers to shift some of their ad dollars to the alliance.

"This is a pretty clear indication they have been successful in what was a very complex exercise," Matt Lawson, Marin's marketing vice president, told Down Jones. "It was a huge gamble they made, but one that appears to be paying off."

However, Marin’s report is contradicted by numbers from an online marketing firm, Efficient Frontier, which reported that Microsoft-Yahoo’s impression share fell by 8 percentage points and its paid click share fell by 2.5 percent. There is one notable caveat, though, that Efficient Frontier’s numbers only cover the fourth quarter of 2010, so three months versus Marin’s four months from August 15 to December 15.

Also, Efficient Frontier reported that Bing, which delivers search for Yahoo, stopped serving ads to “lower quality traffic” during the transition to the alliance, thus improving revenue per click. In September, combined Bing-Yahoo click-through revenue was 20 percent less than Google’s; by the end of November the gap narrowed “substantially” and by the end of December, the revenue per click numbers for each were “virtually identical.” So Bing-Yahoo appears to be fine-tuning its strategy as the alliance goes forward, which is encouraging.

You have to register on Efficient Frontier’s Web site to view the full report.

While its analysis says Bing-Yahoo initially stumbled, the company anticipates the alliance will show gains as the year goes on with small-to-medium-sized advertisers doing more spending on Bing-Yahoo to reach more consumers than they could reach on each of them alone.

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