Microsoft’s search engine marketing deal with Yahoo inc will help make Bing a profitable concern according to one of the company’s top executives.
The Independent reports that Yusuf Mehdi, senior vice president of Microsoft Online, said: “As soon as we close and implement the Yahoo deal, we have achieved a milestone: for advertisers, we are a credible No. 2.”
“Really now, the goal is about share gain” said Mehdi. “If we grow share, we will grow our way into profitability, and we have confidence we can do that.”
Bing, launched just ten months ago, has secured 10.7% of the US search market place. Although this is still far behind Google’s dominant 67.5% share and Bing has yet to make any significant inroads outside of the US market, the new arrivals fast growth has impressed many people invested in search engine marketing and the future of search.
Under the terms of a deal made with Yahoo in 2009, Bing could soon rise to second place in the search market. Currently Yahoo has 17.3% of the US search market according to ComScore; under the deal between the two companies, Yahoo search will soon be powered by Bing – giving Microsoft effective control over 30% of the American search market.
Medhi believes this will make Bing a much more attractive prospect for search engine marketing investment.
“The nice thing is we can say [to advertisers] you can be close to 30 per cent share in one easy buy” he said. ”That 30 per cent carries a lot of weight in the marketplace” said Medhi. “Clearly there’s a huge return in the search marketplace that can more than make up the investments we’ve put in to this point.”
Bing is seen by many as Microsoft’s best hope of securing a profit from its attempts to build a successful online business model. According to figures in The Independent, the online department has lost more than $5bn over the past four years.
However important Bing is though, Medhi appears to be realistic about the reality of competing with Google. Over the last year, Google’s share has in fact grown 0.7% and Microsoft’s PPC paid search client, AdCenter, is far less popular than Google’s AdWords.
“Ultimately we want to be a major player at scale, so we’re going to have to grow against Google at some point” he said “[but] we’re still out manned and outgunned by Google, they still have way more engineers than we do.”
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