Yahoo and Microsoft To Merge Search Marketing

In an effort to compete with Google's dominance in search marketing, Yahoo! and Microsoft announced today that they have received regulatory clearance by the Federal Trade Commission to form a search alliance. The announcement means that the entire webiverse of PPC marketing will now be controlled by two large players, but for advertisers it will be somewhat easier to manage PPC budgeting across two major services instead of three. 

Yahoo's revenue from and share of the PPC has been steadily eroding over the past year, mostly due to inroads by Microsoft with the introduction of its new search engine, Bing. Yahoo cited increasing losses from its affiliate-marketing sites, from which it generates a great deal of its search-marketing revenue, in seeking the merger.

Google's share of the PPC market has been flat at about 80% of all PPC revenue over the past year. For Microsoft, the merger will provide a big boost to its relevance in the paid-search market, although the combined PPC revenue for both companies is still only about a fifth of the market.

Yahoo says there will be no immediate changes for its Yahoo! Search Marketing advertisers, and will probably wait until after the all-important 2010 holiday season is over before migrating to a shared platform with Microsoft.