Microsoft – Yahoo Deal : Great for SEM Industry

With the new Microsoft – Yahoo search deal announced lets take a moment to think about the impact the joining of the #2 & #3 search platforms on the Internet will have on Search Engine Marketing spending.

In a recent post, “2009 SEM Spending Up While Executive Confidence Down“, I highlighted that SEM spending currently makes up 60% of Interactive Marketing budgets and will grow to $31.6 Billion annual spend by 2014. These stats were released before a “viable” competitor to Google was in the marketplace.

Yes, the Microsoft – Yahoo deal will create a true competitor to Google in the search and Pay-Per-Click (PPC) advertising markets. With Microsoft & Yahoo coming to accords with the search agreement they will now have a combined control of 25 – 30% of the search market.

Businesses are now shown a clear second option for their PPC budgets and this will have a dramatic impact on SEM spending. Divided it required twice the effort to achieve results in Bing & Yahoo but with a streamlined solution businesses will begin advertising on a new platform that reaches more viewers for less cost (no brainer, right?).

Some may shift funds away from Google PPC spend and apply that to their new Microsoft-Yahoo PPC budget. However, that is a small fraction of businesses who are displeased with their Google advertising. Most businesses will begin to add on to their budgets to accommodate a second advertising avenue that will allow them the reach up to 97% of search engine users through just 2 platforms.

By simplifying the search landscape, Microsoft and Yahoo have not only created a true competitor to Google search but have created an attractive opportunity for businesses to spend their online marketing budgets.

Overall, the deal is Great for SEM Industry.