Yahoo, Microsoft Look To Merge Search Operations; Google Gets More Personal

WASHINGTON, December 7, 2009 – While Yahoo and Microsoft announced Friday they remain hopeful they will be able to conclude a deal that would allow Microsoft to power Yahoo search and Yahoo to take over search advertising sales for both companies, Google said Friday it is making a number of enhancements to its search engine including personalizing the search experience.

ComScore, a digital marketing intelligence company, found in September 2009 that Google sites led the U.S. core search market with 64.9 percent of the searches conducted, followed by Yahoo sites nabbing 18.8 percent, Microsoft sites with 9.4 percent, Ask Network and AOL each capturing between 3 and 4 percent of the market.

Eli Goodman, a search evangelist for comScore, said in August that a “search partnership between Microsoft and Yahoo certainly makes the combined entity a more formidable competitor to Google in the U.S. search marketplace.” Goodman said “the challenge will be to create a search experience compelling enough to convert lighter searchers into regular searchers which is generally easier than converting new users.”

“Separately, Yahoo and Bing, with 20 percent and 8 percent of the market share respectively, are unable to efficiently meet the inventory needs of advertisers which are attainable through Google,” said Craig Macdonald, a senior vice president of products for Covario.

Yahoo and Microsoft said Friday the companies have “finalized and executed the definitive search and advertising services and sales agreement and license agreement in accordance with the letter agreement announced in July.”

In November 2009 the Australian Competition and Consumer Commission said it had no objections to the proposed deal between Yahoo and Microsoft. The companies said the Canadian Competition Bureau has also finished its review and raised no concerns pending final submission of the agreement.

However, Yahoo and Microsoft still need regulatory approval from the United States and European Union before they can implement the deal.

Google, meanwhile, is working hard to retain its search leadership. The company has a new homepage and last week launched a fresh layout for images. Google is offering site performance data, the ability to find and read content written in other languages, search options in more languages, region tags next to search results, and automatic spelling correction.

Google also said it will use 180 days of search activity from a user’s browser to provide the most relevant search results for an individual whether they are signed onto a Google account or not.

“Today we’re helping people get better search results by extending Personalized Search to signed-out users worldwide, and in more than forty languages. Now when you search using Google, we will be able to better provide you with the most relevant results possible,” according to an entry from the Official Google Blog Friday.

“Previously, we only offered Personalized Search for signed-in users, and only when they had Web History enabled on their Google Accounts. What we’re doing today is expanding Personalized Search so that we can provide it to signed-out users as well,” reads the entry.

Kevin Bankston, a senior staff attorney with the Electronic Frontier Foundation, said “Google’s new search customization plan highlights a continuing privacy problem: Google can and does uniquely identify the computers of users that aren’t even signed into a Google account, using cookies and IP addresses, and although users can opt out of this new search customization, they cannot opt out of that tracking.”

He continued that “considering the sensitivity of a typical Google user’s queries, and considering that Google does not attempt to anonymize your search queries until they are nine months old, this represents a significant privacy threat, enabling the government or civil litigants armed with your cookie value or your IP address to legally demand your search history.”

Google said it is still possible for a user to turn off customization results when they are conducting a search.