Microsoft overtakes Yahoo in U.S. search market

By on January 12, 2012, 9:16 AM

Microsoft's Bing search engine surpassed Yahoo for the first time even in December, according to data from ComScore. Although it was a narrow win, capturing 15.1% of the U.S. search traffic versus 14.5% for  Yahoo, it's still a significant milestone for the company that puts them in second place behind Google. It remains a tough battle to the top, however, as Google remains distant with a whopping 65.9% of the market.

More than 18.2 billion core searches were run last month, a 2% gain from November. Google served up 12 billion of those, followed by Microsoft with 2.7 billion and Yahoo with 2.6 billion.

Microsoft forged a 10-year agreement to provide search technology to Yahoo under Carol Bartz' tenure. The deal has played an important part in Bing's growth and enabled Yahoo to save money. But even though it uses the same search technology as Bing, Yahoo has been bleeding market share for a while, going down from 16% last year while Microsoft has gone up from 12% in that period.

Yahoo’s eroding search share is one of the reasons its revenue has been falling during the past three years, causing a sharp decline in its stock price as well, and the ousting of Bartz as CEO. The company just hired PayPal's Scott Thompson to replace her and attempt a much needed turnaround.

For Microsoft, there's still a long road toward profitability in search. The firm's online division has suffered operating losses of over $5.5 billion since 2009, but Microsoft seems determined in pushing its way into a strong position by marring Bing with many of its own products, such as Windows Phone and Xbox 360.

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