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Microsoft-Yahoo Deal Could Affect Google Stock

The recently approved merger between search providers Yahoo and Microsoft can greatly improve the latter’s Bing search engine and pose a considerable threat to current market leader Google’s stock, according to financial information provider Trefis.

Google currently owns the lion’s share of the market with a 65% share, whereas Yahoo and Microsoft control only 10% and 8% respectively. Yahoo in particular has been down in recent years, which has contributed to its approval of the merger.

The Trefis report claimed that the two companies’ 10-year partnership will move Yahoo searches over to Microsoft’s Bing, which will allow the latter to improve its search technology and develop into a more competitive alternative to Google.

Trefis believes that Microsoft’s market share can increase up to 10% with the merger, especially since it has been on the rise for the past several quarters. This in turn will drive up Microsoft stock, of which 7% currently comes from Bing revenue.

Microsoft stock has been on the rise for the past several quarters, but prior to the merger, the increase has impacted smaller competition such as AOL and Yahoo. Today, however, Trefis believes that Google may be increasingly affected by these market share gains.

Besides user search, Microsoft has also started offering many of the services currently provided by Google, including maps, video search and image search. These, according to experts, can also be further developed with revenues earned from the deal.

The Microsoft-Yahoo deal was approved last month after years of negotiation, starting with an offer from Microsoft in 2006. The deal will mostly involve the two sharing responsibility and profit for search engine ads over a 10-year period.