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comScore Study Highlights Challenges and Opportunities for Microsoft-Yahoo! Search Partnership

August 14, 2009

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To Compete Successfully with Google for Market Share, Microsoft-Yahoo! Need to Focus on Increasing their Users’ Loyalty

Reston, VA (RPRN) 8/14/2009--comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released an analysis of the U.S. search market landscape, following the search partnership announced recently between Yahoo! and Microsoft. The analysis reveals that while the two companies’ combined search share still lags Google by a wide margin, their combined search audience offers opportunity to become more competitive in the search marketplace.

In June 2009, Google Sites had a 65.0 percent share of searches in the U.S. core search market, compared to 28.0 percent for Yahoo Sites (19.6 percent) and Microsoft Sites (8.4 percent) combined. Despite lagging considerably in terms of overall search share, the combined searcher penetration of Yahoo! and Microsoft was 73.3 percent, not far behind Google at 84.0 percent. The source of the discrepancy between search share and searcher penetration is that searchers on Google conducted significantly more searches on average in a month (54.5) than did searchers on Yahoo and Microsoft (26.9).

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U.S. Search Market Overview for Top 3 Core Search Engines

June 2009

Total U.S. – Home/Work/University Locations

Source: comScore qSearch

Searcher Share of Searches per

Penetration Searches Searcher

Total Core Search 100.0% 100.0% 70.5

Google Sites 84.0% 65.0% 54.5

Microsoft Sites + 73.3% 28.0% 26.9

Yahoo! Sites (Combined
Yahoo! Sites 56.5% 19.6% 24.5

Microsoft Sites 41.4% 8.4% 14.3

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“The recently announced search partnership between Microsoft and Yahoo! certainly makes the combined entity a more formidable competitor to Google in the U.S. search marketplace,” said Eli Goodman, comScore Search Evangelist. “While they are still looking up at Google in terms of market share, they have a real opportunity to make headway given that nearly three-quarters of all searchers conduct at least one search on these engines every month. The challenge will be to create a search experience compelling enough to convert lighter searchers into regular searchers which is generally easier than converting new users. Though clearly easier said than done, if they were to equalize the number of searches per searcher with Google they would command more than 40 percent market share.”

“Separately, Yahoo and Bing, with 20 percent and 8 percent of the market share respectively, are unable to efficiently meet the inventory needs of advertisers which are attainable through Google,” commented Craig Macdonald, CMO and SVP of Products for Covario. “The combination of the two platforms, however, gives advertisers the ability to reach about 30 percent of the search market in a more efficient manner – which may drive an increase market share post-integration. A market share of 30 percent also represents a critical threshold that many marketers feel is necessary for them to justify the investment of national marketing dollars in a particular program.”

Google Searchers Have Higher Loyalty than Microsoft and Yahoo! Searchers

comScore also conducted an analysis of search loyalty among users of the top three engines in order to determine what challenges exist for the Yahoo!-Microsoft partnership. The analysis examined the use of the various alternative search engines by users of the Google, Yahoo! and Microsoft engines, revealing that those who searched on Google had the highest loyalty rate, with 68.9 percent of all their searches occurring on Google Sites. Users of the engines at the combined Yahoo! and Microsoft Sites conducted 32.6 percent of their searches on the combined Yahoo! and Microsoft Sites, but a much higher 60.7 percent of their searches on Google Sites.

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Cross-Searching Analysis for Top 3 Search Engines

June 2009

Total U.S. – Home/Work/University Locations

Source: comScore qSearch

Searchers at:

Google Sites Microsoft Sites + Yahoo!

% of Searches Conducted at: Sites (Combined)

Total Core Search 100.0% 100.0%

Google Sites 68.9% 60.7%

Microsoft Sites + Yahoo! 24.8% 32.6%
Sites (Combined)
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“The challenge facing a Microsoft/Yahoo! combined search offering is that choice of search engines is often a subconscious decision on the part of the user,” said Gord Hotchkiss, President & CEO, Enquiro Search Solutions. “For Microsoft/Yahoo! to disrupt the Google habit, they have to offer a compelling enough reason to do the cognitive heavy lifting required to break a subconscious habit. A significantly differentiated and superior search experience would be such a reason. The other option is to continue to interrupt consistently ‘upstream’, by integrating search tightly into their properties or applications so that people don’t have to go to the effort – minimal though it is – to go to Google to launch their search.”

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