With Bartz Gone - Whither Bing?

Does this week's shakeup leave an opening for Microsoft to capitalize on its search and advertising deal with troubled Yahoo?

With the ouster Tuesday of Yahoo CEO Carol Bartz and the announcement that the search firm will embark on an overall strategic review of its business, a lot of questions are left unanswered.

For instance, what will happen with Yahoo's (NASDAQ: YHOO) much vaunted search deal to use Microsoft's (NASDAQ: MSFT) Bing search and advertising technologies to underlie Yahoo search?

According to some analysts who have closely watched that deal, little is likely to transpire quickly -- but the unraveling of Bartz's strategy in the longer term could lead down a number of paths, including the possibility that Microsoft could get what it started out to acquire three and a half years ago -- Yahoo's search and advertising assets outright.

After a failed hostile takeover in 2008, Yahoo under Bartz agreed to let Microsoft handle its search and advertising business in July 2009. Bartz's sudden departure may proffer an opportunity for Microsoft to go further.

"I would think that Microsoft might go the rest of the way," Rob Enderle, principal analyst at Enderle Group, told InternetNews.com.

So far, Microsoft's investment of time and resources into taking over Yahoo's search assets has added little to its bottom line, although it has strengthened its market position vis-à-vis search giant Google (NASDAQ: GOOG).

According to Web analytics tracker Net Applications, Microsoft's Bing search engine share of 1.18 percent globally combined with Yahoo's share (running Bing infrastructure) of 5.63 percent share still only comes in at a meager 6.81 percent total compared to Google's 92.04 percent.

Still, that may tempt Microsoft CEO Steve Ballmer, who at one point had been willing to ante up $44.6 billion for all of Yahoo.

"I think it could go further in Microsoft's direction," Enderle added.

However, picking up more search share cannot be a generic goal for Yahoo -- or, for that matter, Microsoft -- going forward. Both Enderle and Tim Bajarin, principal analyst at technology advisory firm Creative Strategies, told InternetNews.com that key to the future as it lays now is to find ways to make headway in mobile search, the current hot market.

At the same time, at least in the short term, Yahoo is likely to hold onto its other core businesses, such as its numerous content sites like Yahoo Finance and Yahoo News.

"Yahoo is still one of the largest [domains] in terms of traffic, and a caretaker CEO isn't likely going to change that," Bajarin said. "The hole I see is to expand and emphasize mobile content and search, which is where the growth is," he added.

A request for comment from a Microsoft spokesperson was not returned in time for publication.

Stuart J. Johnston is a contributing editor at InternetNews.com, the news service of Internet.com, the network for technology professionals. Follow him on Twitter @stuartj1000.




Tags: search, Microsoft, Yahoo, Bartz


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