As the blogosphere combs the tea leaves for insights into the
dialogue between Microsoft Corp. (NASDAQ:MSFT) CEO Steve Ballmer and Yahoo! Inc. (NASDAQ:YHOO) CEO Carol Bartz (pictured), we're boning up on the search business.
Nielsen Online's March data on the top U.S. search providers came out a few days ago,
showing Google Inc. (NASDAQ:GOOG) still capturing the lion's share with 64%, Yahoo! a distant second with nearly 16% and Microsoft in third with a mere 10%.
Microsoft has apparently
struggled to get even its own employees to embrace its Live Search,
reports Cnet senior writer Ina Fried.
"Among its full-time U.S. workers, Microsoft says that, for February,
Live Search and Google had roughly equal share, at around 48 percent
apiece, with little search traffic going to Yahoo! or any of the other
search players," says Fried. Reportedly, that's an improvement over a year ago, when an unnamed Microsoftie recalls hearing in an internal meeting that "four-fifths of the company's search traffic was going to Google."
Meanwhile, Jefferies & Co. Internet
analyst Youssef Squali who covers Yahoo!
says a partnership that involves the company's outsourcing search to Microsoft in return for serving display ads on Microsoft properties would be a "clear positive" for Yahoo!.
"Outsourcing the search infrastructure could bring YHOO incremental savings of $1.0-1.3B," writes Squali. "Our back of the envelope analysis suggests MSFT's 4Q08 display revenue to be in the range of $300-400M. A50/50 revenue share deal to serve display ads on MSFT's sites could add $600-800M in incremental revenues to YHOO, all else equal." -
Mary Kathleen Flynn
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