Search. Click. Repeat. Google pads U.S. search lead

John Shinal · May 22, 2008 · Short URL:

 Microsoft's relentless pursuit of Yahoo has been called many things since it kicked into overdrive earlier this year. Crazy, desperate and foolhardy are just some of the words that some, including me, have used to describe Steve Ballmer's bid for the company's search rival.

We've made the case before that buying Yahoo for more than $40 billion isn't the best way for Microsoft to improve its position in online advertising. At the same time, Ballmer needs to do something.

The latest numbers from comScore bear this out. Once again, Google was the only one of the top five U.S. search companies to gain market share, which came at the expense of Yahoo, Microsoft, AOL and

Google now controls just over 61% of the market, and given the recent trends, it will soon capture two out of every three searches.

Its market share is twice that of Yahoo and Microsoft COMBINED! The two had 20% and 9% of the market, respectively.

Numbers earlier in the week from Neilsen Online told a similar story, with Google, Yahoo, and Microsoft getting 62%, 18% and 10%.

Google's gains come after both Microsoft and Yahoo have spent billions trying to improve their own search technologies. 

Clearly, Ballmer has to do something, anything. Buying traffic with LiveSearch shopping discounts, a plan Microsoft unveiled this week, fits under those categories.

But given Google's lead and momentum, it's almost inconceivable that Microsoft will ever come close to catching the leader.

It could, however, use its cash hoard to buy some young Internet startups that are working on technology that could leapfrog traditional search -- things like recommendation sites, behavioral targeting or even something like what Tumri is doing -- bypassing keywords and allowing advertisers to place ads next to product names and other data.

Or, Microsoft could acquire Facebook and try to figure out how to monetize those 120 million users.

But buying Yahoo, given its falling search share and meager revenue growth? If that's Ballmer's answer, he better be ready to spend much and spend often on LiveShare promos. 


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