Latest search market share numbers show why Steve Ballmer wants Yahoo so badly

John Shinal · March 20, 2008 · Short URL:

 The latest numbers on U.S. search market share show why Microsoft CEO Steve Balllmer wants to acquire Yahoo so badly that he's willing to pay more than $40 billion.

As we've told you before, we still think it's a mistake, because buying Yahoo isn't going to solve the Google problem for Microsoft.

For proof, look at the February search numbers from comScore show a continuation of a long-term trend: Google's market share rose to a record high, while Yahoo's sunk to a record low.

Google now gets just under 60% of search queries, nearly three times Yahoo's share of almost 22% and six times Microsoft's share of just under 10%.

Given that Yahoo and Microsoft have nothing to show for their billions of dollars of investment in their respective search businesses, I still don't see how combining the two is going to yield a different result.

One troubling trend that's worth watching for all search companies -- overall year-over-year market growth decelerated to 15%, a significant drop from the 23% year-over-year growth in January. 

That could be do in part to the law of large numbers, but one other number from the report makes it a trend worth watching.

The total number of searches decreased from January, and the 5.8% sequential drop is the largest in at least six months.

That's a reminder that the U.S. search business, now more than a decade old, likely has already seen or will soon see the end of 20% annual growth.

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