Yahoo Dings Bing: Mayer Says Search Deal Underperforms
February 13, 2013 10:01 AM
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Mayer once growth not to trade market share at Microsoft
Yahoo CEO Marissa Mayer recently stated that the company's search partnership with Microsoft is not delivering the gains expected. Mayer says that the deal is not delivering search market share gains or the revenue that it should be.
"One of the points of the alliance is that we collectively want to grow share rather than just trading share with each other," Mayer said at the Goldman Sachs Technology and Internet Conference in San Francisco on Tuesday.
Mayer's appearance at the conference was her first appearance at an investor conference since
taking the reins
of Yahoo last year. Mayer also noted during the conference that she wanted Yahoo to entice users to spend more time on its various web properties. She also promised to reduce the number of mobile apps Yahoo offered.
"I'm not confused. Our biggest business problem right now is impressions. Basically can we grow impressions, can we get growth happening here," Mayer said.
Yahoo reported revenue in 2012 that was flat at approximately $5 billion compared to 2011. In 2010, Yahoo generated about $6.3 billion in revenue. The search deal between Yahoo and Microsoft started in 2010 and lasts for 10 years.
In the U.S., Google remains by far the most popular search engine with 66.7% of the market in December. During the same month, Microsoft had 16.3% of the search market while Yahoo had 12.2%. Interestingly, two years ago at approximately the same time the search deal with Microsoft started, Yahoo had 16% of the US search market while Microsoft had 12%.
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RE: Read between the lines.
2/13/2013 3:30:24 PM
nope, the logic is not potentially flawed.
The money these search engines generate are based on the amount of search results served, not whether the user got the answer or not, and on which try. The more tries a user attempts the more ads are served thus viewed by user and hence the higher chance of having the user "getting informed" about the advertising company's products.
An analogy to this would be: imagine roads were privately owned and made money based on number of ads served on their billboards that change every X seconds. roads that have traffic jams would serve more ads to the users and thus generating higher revenue per user than the roads that do not have jams as it will serve less ads.
RE: Read between the lines.
2/14/2013 10:17:22 AM
However, in your analogy, there would be a congestion free road that costs the exact same. Which would you choose? In the end, the road with more traffic jams simply will never be as popular.
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