Microsoft, Yahoo Combine Paid Search

Microsoft says it has finished moving Yahoo's paid search listings in the U.S. and Canada over to Microsoft's adCenter advertising platform, reaching a milestone in the companies' search alliance to compete with Google.

Microsoft said Wednesday that advertisers who use adCenter will have their listings appear on its Bing search engine or on Yahoo, depending on which is used for a search query. The combined marketplaces through a single platform means advertisers will be able to reach almost a third of Internet users in the U.S. and Canada, according to Microsoft said.

Before the latest announcement, Microsoft and Yahoo had completed the merger of organic searches, which did not include search listings, on Bing. As of the end of August, the two companies combined accounted for nearly a quarter of all U.S. web searches, according to Internet metrics firm Experian Hitwise. Nevertheless, Google remained the clear leader with nearly a 72% share of searches.

In announcing the milestone, David Pann, general manager of the Microsoft Advertising Search Network, warned advertisers that they might see prices rise as a result of movement to one platform. That's because adCenter is an auction-based marketplace, and the higher volume will likely lead to higher bids for popular keywords.

However, Pann expected prices to eventually level off. "As advertisers experiment with bidding on each keyword to determine what works best for their campaigns, we expect these prices to stabilize within weeks," Pann said in his blog.

Microsoft agreed to take over search on Yahoo in a 10-year deal reached last year. Under the agreement, 12% of the revenue from Yahoo-driven searches goes to Microsoft. The arrangement covers only search listings, not display advertising, which Yahoo will still own and operate.

The two companies are in the process of combining their international search operations. They expect to finish the work by early next year.

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