Yahoo Struggles, Facebook Expands: Search Engine Wars Continue

July 22, 2010 (CAP News Wire) – Perennial second-place search engine Yahoo just can’t catch a break. Despite a recent merger with Bing and a cross-integration with Facebook, Yahoo’s future seems bleaker than ever.

“Yahoo Inc missed Wall Street’s revenue estimates in the second quarter as some customers unexpectedly cut spending on online display ads toward the end of June, and shares fell more than 6 percent,” reports Reuters.

“The lower-than-expected revenue, which came even as Yahoo continued to improve its profit margins, raised fresh concerns about Yahoo’s efforts to increase revenue growth, and about the health of the online advertising market that Yahoo depends on.”

That’s not all. In a recent report, Yahoo reportedly recommends competitors’ search engine tools over its own. In an updated version of the Yahoo style guide released last month, “the Yahoo Style Guide’s recommendations fail to mention one tool that was once a vital part of the SEO armoury – their own keyword research tool,” writes William Hobson at Vertical Leap. This despite the fact that Yahoo recommends SEOMoz and even Google Adwords.

Then again, since Yahoo is basically transitioning over the Bing brand, does it even matter? The question is, how is Microsoft doing against Google?

Not so good as once thought, according to eCommerce Guide. “Despite successes in the U.S., where the search engine has made some gains, however, Bing’s overall share worldwide remains tiny and stagnant,” writes Stuart Johnson.

“According to Net Applications, Bing finished June with 3.39 percent market share of searches made globally, a mere 0.43 percent gain from the 2.96 percent share that Bing held when it finished its first month of operation at the end of June 2009,” Johnson continues.

So Google continues to dominate search marketing — no big surprise there. But what about Facebook’s up-and-coming SEO competition, believed by many to be the last chance against the Google giant?

Observers aren’t as optimistic as they once were. ” … as a search property Facebook has, in the past, been almost unusable and no threat to Google or any other search engine,” according to Search Engine Land in an article called “Facebook ‘Search War’ With Google Mostly Sound And Fury”.

“In general the search user experience on Facebook is ambiguous and cluttered … In fact, it has been (so far) a missed opportunity for Facebook partner and investor Microsoft. But Microsoft’s Bing is becoming more prominent on Facebook and the site itself has tried to improve search.”

But then again, Facebook’s just begun its SEO trek, and it’s already scored huge gains worldwide. “Facebook … is growing at a dizzying rate around the globe, surging to nearly 500 million users, from 200 million users just 15 months ago,” according to the New York Times. “It is pulling even with Orkut in India, where only a year ago, Orkut was more than twice as large as Facebook. In the last year, Facebook has grown eightfold, to eight million users, in Brazil, where Orkut has 28 million.”

On top of that, a new (and free) iPad app will help users to unclutter all that famous clutter (read about that here). And given the iPad’s popularity, that could be huge.

It’s too early to say whether any of these companies can challenge Google, but the sound money’s still on Facebook.