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Can MicroHoo topple Google?

Posted 07-31-2009 at 10:38 AM by pereb

Look out, Google; MicroHoo is coming to get you. Wednesday, the deal between Microsoft and Yahoo (“MicroHoo”) was finally signed, after months of speculation and discussion. The number two and number three search engines in the U.S. have joined forces and become one. They simply couldn’t stand to sit back and watch Google corner the market anymore. It was time to topple the giant.

Google is the undisputed heavyweight of search engines; it holds 65% of the search market in the U.S., while Yahoo holds just 19.6% Microsoft only 8.4%. Separately, their numbers are relatively insignificant when compared to Google’s dominant market share. Together, however, MicroHoo should theoretically hold nearly half the market share that Google has (28%). The question is whether this will make any difference, in the big picture. The idea behind combining forces and working as one against Google instead of competing with each other makes sense; not only do they get to pool their resources, but each company effectively has one less competitor.

At this point, it’s hard to tell what effect this will have on the industry of search engines and marketing. Will this merging make a difference? Reasonable arguments could be made both ways. On one hand, even combined MicroHoo only holds 28%. Google has been steadily growing for years, and it’s believable that even a company that holds less than half the market share that Google has simply won’t have enough power to make a difference. That makes sense. However, it could also be argued that having one major competitor instead of two semi-major competitors will change the landscape greatly. Today (well, until Wednesday), just three companies hold 93% of the market. Now that number has been reduced to just two search engines. With Microsoft and Yahoo able to focus their efforts entirely on Google, maybe Google will finally be toppled.

I think it’s way too early to predict what change this will (or won’t) make. It should be interesting to watch unfold, however. Enjoy the show.
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