So far, it seems that Microsoft (MSFT) has gained search share at the expense of Yahoo! while Google's search share has remained relatively steady. If Bing's popularity grows, however, it's bound to make a dent in Google's dominance of search.
So what would be the impact if users began to give up Google (GOOG) in favor of Bing?
Here are a few numbers to consider:
- Google derives 99% of their revenue from advertising.
- Google derives 69% of ad revenue from "Google web sites". This means Google search and other sites owned by Google such as YouTube. The vast majority of the revenue is derived from search advertising.
- According to the most recent annual report, advertising revenue from "Google web sites" was $14.4 billion.
- Google's overall share of search according to ComScore's most recent measure for May is about 65%, a 0.8% increase over April.
A 65% search share equates to $14.4B in annual ad revenue for Google. So for every percent of search share that Google loses, it would cost the company roughly $220 million in revenue.
At this rate, Google will not take the Bing threat lightly. Look for Google to respond aggressively if Bing starts to really take off.
Disclosure: no positions