Once the world's online search leader, Yahoo's share has sharply declined, putting it in danger of losing its relevance in a market increasingly dominated by Google with a staggering 65.6 percent share.
Yahoo's search market share in November fell to 17.5 percent from 18 percent in October, the lowest ever recorded for Yahoo, according to a monthly comScore report. Cannibalising Yahoo's market share is Microsoft, whose new Bing search site gained 0.4 points of the search market to 10.3 percent in November. That was the first time Microsoft owned more than 10 percent of the market since September 2007.
Despite that good news, it's really a mixed blessing of sorts for Microsoft, which entered into a search deal with Yahoo that is expected to start in the next several months, CNNMoney.com said.
When the deal was announced in July, analysts largely praised the marriage, since the companies held a combined 28 percent of the market-close to the 30 percent that experts say is needed to convince advertisers that a company is a relevant competitor in a marketplace.
Since the July announcement, “Microhoo” has gone in the wrong direction. The companies' combined share has taken a 0.4-point hit, as Yahoo's share has fallen by 1.8 points, outpacing Bing's 1.4-point gain.
Google grew its share by 0.9 points since July to take 65.6 percent of the search market in November. That's the largest share Google has ever garnered.
Meanwhile, Yahoo has lost share for 10-straight months. As the closing date nears for the search rivals' deal, some say Yahoo is reaching a tipping point that could make or break the value of its partnership.
Under the 10-year agreement, Microsoft will power the searches that users make on Yahoo.com. In return, Microsoft will pay Yahoo 88 percent of the revenue it gains from searches on Yahoo's sites.
Yahoo.com and Bing.com will maintain their own branding but search results on Yahoo.com will say “powered by Bing.”
Both Yahoo and Microsoft have poured millions of dollars into advertising campaigns to get users to come to their Web sites. Yahoo's new “It's Y!ou” campaign has been plastered all over billboards and television spots. Microsoft just launched its new highly publicised Bing iPhone App on Tuesday.
As a result, some advertisers believe users who search on those sites are more likely to indulge a sales pitch and therefore are more likely to click on their ads than Google's users.
So even as Google continues to gain share at “Microhoo's” expense, Yahoo and Microsoft live on to fight for high-quality searchers as a way to stay relevant, CNNMoney.com said.