Will Bing Surpass Yahoo in 2010?

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Includes: GOOG, MSFT, YHOO
by: Eric Savitz

Well, here’s a provocative idea on the search market.

Citigroup analyst Mark Mahaney wrote a research note Tuesday on the search engine business which included a summary of a conference call he held for clients with Danny Sullivan, the editor-in-chief of the wen site Search Engine Land, along with Nick Gould, the CEO of the research firm Catalyst Group.

Mahaney writes that Sullivan’s take is that with a year, Microsoft (NASDAQ:MSFT) Bing could see its share of the search market grow from 8%-10% now to 15% to 20%, “with Yahoo’s (NASDAQ:YHOO) apparent lack of aggressiveness in search being a key factor.” At the top of that range, Microsoft would push past Yahoo to be the No. 2 player in the sector behind Google (NASDAQ:GOOG).

The piece notes that Gould had a more mixed view of Bing, noting a detailed eye-tracking test of 12 search users comparing Bing and Google found that most users preferred Bing’s visual design, and thouhgt it was slightly better in organization and refinement options, but that the sites returned equally relevant search results, and that most users said they would continue using Google voer Bing.

Mahaney adds that he conducted his own proprietary study of the three search engines, comparing 200 search queries for relevancy. He said Google had the most relevant results, or was tied for top relevancy, 71% of the time, with Bing most relevant or tied 46% of the time, and Yahoo offering the best results alone or tied 30% of the time. The analyst writes that he views the results as both “generally validating the positive Bing reviews,” but also “demonstrating Google’s very strong position.”

In today’s trading:

  • MSFT is off 34 cents, or 1.5%, to $22.86.
  • YHOO is down 29 cents, or 2%, to $14.62.
  • GOOG is down $8.24, or 2%, to $401.37.

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