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Microhoo May Drive Search Advertisers to Social Media

[picapp align=”left” wrap=”true” link=”term=microsoft+%2b+yahoo!&iid=5642738″ src=”a/6/d/e/Yahoo_And_Microsoft_1d31.jpg?adImageId=10613268&imageId=5642738″ width=”234″ height=”162″ /]The Microsoft and Yahoo! partnership may have unintended consequences for its search engine advertisers.

Last week, the companies won U.S. and European regulatory approval for their 10-year partnership. Under the deal, Yahoo! will use Microsoft’s Bing search engine to handle queries on its site, and sell ads next to the results.  Yahoo! entered the arrangement as a way to cut search-related costs, while the deal is intended to help Microsoft gain ground on Google, which controls about two-thirds of the U.S. search market.

Yahoo! has lost almost a fifth of its market share over the past year, while Bing has gained market share for eight straight months.

“Together, Microsoft and Yahoo will promote more choice, better value and greater innovation to our customers,” Microsoft Chief Executive Steve Ballmer said in a statement.

However, analysts say the two former rivals face a tough task combining their operations. “The challenge now lies in implementing the partnership so that the transition is smooth,” FBR Capital Markets analyst David Hilal wrote in a research note. “Any glitches could result in customers and partners diverting more of their business to Google.”

The justification for the partnership was to increase the level of competition among advertisers, boosting revenues for Yahoo! and Microsoft. Of course, those higher revenues will come at the expense of search engine advertisers since more competition for ad space will ultimately drive prices up.

So what’s the solution? Advertisers should start looking for more low cost options – particularly in social media, which has proven to be the cheapest way to reach a large number of people.

But if that happens, all the ballyhoo over Microhoo may wind up being much ado about nothing.

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About the Author
Known as The Insightful Copywriter, Gloria Grace Rand is also an inspirational speaker, author and host of the Live. Love. Engage. podcast. Prior to launching her SEO Copywriting business in 2009, Gloria spent nearly two decades in television, most notably as writer and producer for the award-winning PBS financial news program, “Nightly Business Report.”

Gloria turned to writing as a way to communicate, since growing up with an alcoholic father and abusive mother taught her that it was safer to be seen and not heard. But not speaking her truth caused Gloria problems such as overeating, control issues, and an inability to fully trust people. After investing in coaching & personal development programs, and studying spiritual books like “A Course in Miracles,” Gloria healed her emotional wounds. Today, she helps entrepreneurs develop clarity, confidence and connection to the truth of who you are, so you can create a business that has more impact, influence and income!

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