Will Microsoft devour Yahoo! and challenge the unstoppable Google?

In the world of search, Google has a 65% share of US traffic, Yahoo! with 19.5% and Microsoft trailing behind with only 8% (Guardian). The figures speak for themselves – so how can Microsoft hope to challenge the mighty Google in search?

Re-launching its search with the new Bing engine, designed to rival Google, does not seem to have done the trick, but perhaps that’s not what it was meant to do…

Maybe it was conceived to send other search companies a message.

Only a month after its launch we saw it taking some of the Yahoo! market share (Bloomberg). And it’s no coincidence that this week we see renewed talks between Microsoft and Yahoo! If talks succeed then maybe the resulting search engine can claw back market some of the market share.

Search companies make their money through advertising dollars and so far Bing hasn’t raised Microsoft’s search advertising revenue. In fact, it remains static at the 6% share it controlled before the launch (Eweek). That said, if Microsoft was to gain just one percent of the search share from Google, it would cost Google $220 million in revenue.

Rumour has it that Microsoft is about to announce poor fourth fiscal quarter results, following a drop in sales of personal computers bundled with its technology. Over the past fifteen years Windows operating systems have been the only option for many of us and now Google are starting to challenge that domination with its open source operating system Google Chrome OS.

It’s hardly surprising that Microsoft wants to regain some advertising revenue from Google but will it consume Yahoo! in the process? We’ll have to wait and see.