While the Google suite of websites (visited by 274 million people globally, representing 80% of people online) is marginally more popular than Microsoft's (visited by 262 million people globally - 76% of people online) and significantly more than Yahoo's (191 million - 56%), it is increasing the gap.
From December 2006 to December 2007, Google's global audience expanded by 18% - double that of Microsoft (9%) and almost three times Yahoo's growth (7%).
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, Google is more dominant, accounting for 79% of searches, with Yahoo capturing 7% and MSN just 3% of all searches.
Even though Microsoft and Yahoo have significant audience overlap - in the UK, for example, 85% of people who visit a Yahoo online property also visit a Microsoft online property - and a combined search share that would not catch Google's, they could be positioned to create the next generation of ad networks. It could be a combination that rivals Google/DoubleClick.
A Microsoft and Yahoo combination would be a diverse environment, made of up e-mail, search, original content and consumer-generated media, where advertisers could maximise their buys over two of the most trusted online brands.
Furthermore, the next great frontier for online advertising revolves around how it can tackle social media. In this regard, the proposed transaction would give Microsoft one of the industry's strongest portfolios in the growing social media space.
This includes Yahoo Answers (visited by 40 million people globally), Flickr (21 million) and Delicious (1.4 million), alongside Microsoft's investment in Facebook (visited by 38 million people globally).
- By Alex Burmaster, European internet analyst, Nielsen Online.
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