Yahoo-Facebook Collaboration: What Does It Mean for Search Business?
According to the reports coming from certain media outlets, Yahoo and Facebook are engaged in extensive negotiations to enhance their mutual collaboration and develop partnership. The key agenda notes of the discussions include; teaming up for a joint search engine, increase profitability of Yahoo search in Facebook, mutual profit maximization, and find solution to few pending law-suits out of the court. In this regard, the young CEO of Yahoo; Marissa Mayer and COO of Facebook Sheryl Sandburg are leading their teams from their respective companies. According to the analysts, if this goes smoothly, it would drastically change the search business as it can come up with a strong competitor to Google in search business.
Now the question is; what would you call this new model? Analysts at SearchEnabler; a leading SEO platform for small businesses, have termed this new model as ‘Social Search Engine’. The name seems quite relevant with the fact that this venture will be more focused on targeting the lucrative 1 billion Facebook users’ market. Though it is yet to be seen the outcomes of the negotiations, analysts are quite optimistic about this probable model of new search venture. In this regard, we need to learn few basic facts about the search business before assessing the success of the suggested model.
Search business is probably the most profitable corporate venture in the human history. Companies earn billions of dollars in the shape of advertisements and monetization programs. Google; the market leader with 66% share, earns around $40 billion revenue from search advertisement. Yahoo and Bing produce around $2 billion revenue while small player also earn their share of the business. The fundamental reason, why Google earns more, is its wide network of distributors. Unlike that, Bing and Yahoo lack proper and competitive distribution network, which is killing them. Now, if the projected deal between two Yahoo and Facebook is successfully drafted, both of the companies will earn huge profits.
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