What does Microsoft hope to pump from Yahoo in their newly forged search agreement? Search data. Once the two combine powers, search queries that users send to Yahoo will be handled by Microsoft, which will also find out what users end up clicking after a search. More data means Microsoft can better sharpen its search power. However, will even that be enough to catch Google?
Microsoft is hoping that a long-term partnership with rival Yahoo will give it the size and insight it needs to bring in more traffic, more advertisers and ultimately more revenue.
By handling Yahoo's searches along with its own, Microsoft can learn more quickly what works and what doesn't. A smarter search engine might draw more Internet users, and more advertisers could follow, driving up prices.
Size, though, may wind up being far from the magic bullet that Microsoft is counting on in forging a 10-year partnership to power all Yahoo searches.
Search leader Google has had a head start in technical development, and Microsoft already has had plenty of search queries to analyze -- yet it remains stuck at No. 3. Adding more data might not make a difference.
Viewing More Querries
The software maker's stockholders so far have been guardedly positive about the deal, perhaps because it did not require a US$9 billion upfront payment to Yahoo, a condition of a similar deal proposed last year. If Microsoft can't use this partnership to improve its search finances, though, they will eventually run out of patience.
Microsoft expects to spend up to $700 million to get the arrangement up and running, something that could take two years to fully deploy worldwide. It may spend up to $200 million within the next 12 months alone.
But the company believes it's worth it.
With the partnership, Microsoft will funnel Yahoo's nearly 3 billion monthly Web searches. Add that to the 1 billion Microsoft gets on its own, and the software maker will quadruple the queries it processes, allowing its search engine to gain even more insight into how to improve the experience.
Every move a search user makes is fed back into the system, so when the next person comes along with a similar problem, the search engine is a little bit smarter about solving it. For example, if five people in a row click on the fifth link on the results page for "Seattle Space Needle," the search engine -- a sophisticated computer program -- might try moving that link up to the top.
Other Battles
Ultimately, the Redmond, Wash.-based software maker may have to settle for something less tangible.
Google has been making incursions onto Microsoft's home turf, the software that makes computers run and helps people get their work done. By stepping up its game in search, Microsoft may ultimately force Google to focus on its core search engine rather than its fledgling software business, including a recently announced Chrome operating system that could challenge Windows.
Microsoft may be able to claim victory even if it cannot turn size into dramatic search revenue growth.
Source : ECT News Network
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