Microsoft Playing Pepsi To Google’s Coke

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If Microsoft can pull off its Yahoo proposal and manage to get ad systems integrated across properties for both sites, they could be a desirable part of search marketing campaigns that begin and end with Google these days.

Going with Google in the 21st century for paid search needs resembles the time when buying IBM products was always the safe decision. A dominant lead in search turned Google into the place advertisers needed to be.

Microsoft and Yahoo can’t hope to whittle down Google’s search market share to a point where they would be on equal footing. Having a combined third of the search market makes Microsoft/Yahoo a more compelling proposition for marketers: how can an SEM manager ignore one in three searchers?

An analyst cited at ARN agrees. Matt Rosoff of Directions on Microsoft stated it this way:

"What this move does is create two big players again and I think it pretty much guarantees that, as the online advertising market shakes down into two big players, Microsoft is now going to be one of them. Classic market theory usually shows that the market ends up with two majors players, such as Coke and Pepsi or McDonald’s and Burger King, so Microsoft wants to be the other big player."

If that thinking is correct, it provides a compelling argument for Yahoo to approve Microsoft’s offer. Yahoo’s Sue Decker famously noted the company doesn’t mind being second in search. Being second in search advertising, solidly so, should be a good thing too.

Microsoft Playing Pepsi To Google’s Coke
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