Search engine market shares refused to budge in 2011

In a wild year in the search engine business, Microsoft lost billions of dollars -- and gained zip in market share

The final search engine numbers for 2011 leave us right back where the year started.

ComScore reports that Google continues to hold two-thirds of U.S. search market, as it did throughout 2011. Microsoft and Yahoo, bonded together by a search agreement that has Yahoo slapping the user interface on top of Microsoft's Bing results, rate a combined total of about 30 percent, which is exactly where they started last January.

Desktop browser market share

The only big difference between now and then? Microsoft lost a whole lotta money in the process of going nowhere.

In the course of 2011, Microsoft lost more than $2 billion on its search efforts. Although we won't know fourth-quarter numbers until next week, during the first nine months of 2011 Microsoft lost $1.95 billion on its Online Services Division.

The biggest loser is Yahoo, which now keeps 88 percent of the revenue generated by searches made on its site while the other 12 percent goes to Microsoft. Back in July 2009, when Yahoo and Microsoft signed their agreement, Yahoo had 19.3 percent of the U.S. search market and Microsoft/Bing had 8.9 percent -- a total of 28.2 percent, which isn't much different than their combined total now. Only the pecking order has changed. In December 2011, for the first time Microsoft ran out ahead of Yahoo, with Bing at 15.1 percent and Yahoo at 14.5.

Yahoo's 88 percent share of the spoils is worth much less now than it was in July 2009. Microsoft made out like a bandit -- yet it's still losing enormous amounts of money on search.

For years, shareholders and analysts have been calling on Microsoft management to jettison Bing -- or at least stem the red ink. It's possible that process is under way. In the quarter ending Sept. 30, 2011, Microsoft lost $494 million on the Online Services Division, compared to $558 million in the same period a year earlier. That's an 11 percent improvement. Perhaps the final quarter of 2011 will show similar, uh, restraint.

This story, "Search engine market shares refused to budge in 2011," was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow InfoWorld.com on Twitter.

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