If it goes ahead, the Microsoft and Yahoo merger would be one of the major events in the history of the Internet and a credible attempt to challenge the domination of Google.
Whilst the Google suite of websites (visited by 274 million people globally – 80% of people online) is marginally more popular than Microsoft’s (262 million – 76%) and significantly more than Yahoo!’s (191 million – 56%) it is increasing the gap. From December 2006 to December 2007, Google’s global audience grew by 18%, double that of Microsoft (9%) and almost three times that of Yahoo!’s growth (7%).
By Alex Burmaster, European Internet Analyst, Nielsen Online
It is, of course, search where Google’s real dominance lies. In the US in December 2007, Google accounted for 56% of all searches compared to 18% for Yahoo! and 14% for MSN. In the UK, it is significantly more dominant, accounting for 79% of searches with Yahoo! capturing 7% and MSN just 3%.
Even though Microsoft and Yahoo have significant audience overlap (in the UK, for example, 85% of people who visit a Yahoo! property also visit a Microsoft property) and a combined search share that would not catch Google's, they could be positioned to create the next generation of ad networks - one that rivals Google/DoubleClick. It would be a diverse environment, made of up e-mail, search, original content and consumer generated media, where advertisers could maximize their buys over two of the most trusted online brands.
Furthermore, the next great frontier for online advertising revolves around how will it can tackle, or take advantage, of social media. In this regard, the proposed transaction itself would give Microsoft one of the industry's strongest portfolio's in the growing social-media space. This includes Yahoo Answers (visited by 40 million people globally – 12% of people online), Flickr (21 million – 6%), and Delicious (1.4 million – 0.4%), alongside its investment in Facebook (38 million – 11%).
Parent Company Global Metrics: December 2007
| Parent Company | Unique Audience (millions) | Active Reach | % Growth in Unique Audience since Dec 06 | Total Time (millions of hours) | Page Views (millions) |
| 274 | 80% | +18% | 460 | 68,632 | |
| Microsoft | 262 | 76% | +9% | 718 | 27,684 |
| Yahoo! | 191 | 56% | +7% | 418 | 42,073 |
By Alex Burmaster, European Internet Analyst, Nielsen Online
