Wednesday, February 18, 2009

I Drink Your Milkshake.

Read an article tonight referencing a fairly interesting development, ie. that the Yahoo! share of the Search market increased and Google's actually fell at the same time.

Some highlights:

* The results are based on comScore rankings - US data only - as summarized by JP Morgan's Imran Khan

* The big news is that the Yahoo! share of "domestic core search market" was up in January 2009, hitting 21.0% and increasing 0.5% from december's share of 20.5%

* This now makes 6 consecutive months of market share gains, reversing the long-time Declining trend of recent years

* Google's domestic core search market share dropped by 0.5% in January to 63.0% from the 63.5% level in December

* This could be interpreted as the first signs of Google's domestic search share reaching a plateau, something which many industry observers have predicted will happen inevitably

* MSN's domestic core search market share increased in January to 8.5% over 8.3% in December

* This small gain by MSN could be interpreted as a Good News story...or alternatively as a So What? data point since Microsoft clearly needs to make much more substantial gains than these if it is to become competitive, especially given the level of MSFT resources that are currently being allocated to winning in Search

* AOL domestic core search market share increased in January to 3.9% (from 3.8% in December) while Ask Network domestic core search market share dropped to 3.7% in January from 3.9% in December...a bit of a cancelling-each-other-out effect overall happening with these secondary players

So, while Microsoft's MSN and Online Services unit continues to add former top Yahoo! Search executives to its roster, Yahoo! appears to be holding its own, at least for the time being. On the other hand, with key players like
Sean Suchter (former VP of Search Technology), Qi Lu (EVP Engineering - Yahoo! Search and Advertising Technology Group) and most recently (former VP of Search & Advertising Sciences at Yahoo! Labs) Larry Heck joining the "mother ship" in Redmond - and Yahoo! vets Scott Moore and Eric Hadley already on board managing media/programming and branding/global marketing portfolios respectively - I can't imagine how this won't eventually have an overall negative impact on the ability of Yahoo! to remain relevant in the Search category.

And
with numerous signs pointing to a massive company-wide re-org of the entire management ranks happening very soon down in Sunnyvale, I predict continued growth in the Yahoo! Alumni Club membership ranks on the employee payroll at MSFT...with a corresponding Yahoo! death spiral in Search over the next 6-12 months.


So, will this all result in a Fire Sale by Yahoo! to Microsoft after all? Or perhaps another scenario, in which Yahoo! sells off its Search business or possibly attempts to partner with another online player?

I welcome discussion of any and all opinions and theories, so please feel free to post your thoughts in the Comments section.

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