As widely reported by many press sources (including the BBC), Microsoft and Yahoo! have finally struck a deal to combine forces against Google. This much anticipated and expected move has been dragging on for over a year and the final agreement just involves the search side of Yahoo!, rather than a full takeover of the business, but it still results in a significant change in the search market.

The 10-year deal will mean that Microsoft's new Bing search engine will now power the results on Yahoo!, although Yahoo! will retain control of how the search results are displayed. Microsoft will gain access to Yahoo!'s search technology and the PPC advertising platform will move to Microsoft's AdCenter system, but Yahoo! will retain responsibility for selling the search advertising across both networks. Display advertising will remain under the control of each company.

Yahoo! will receive 88% of search ad revenues generated by Yahoo! sites and, together, the 2 companies hope that by combining their technologies they can make a greater dent into the search dominance of Google.

So what does all this mean? Probably very little in the short term as the deal needs to be approved by the authorities and also there will be a major logistical challenge to transfer Yahoo!'s PPC advertiser accounts across to the Microsoft service. However, in the long term this should benefit advertisers who have found the Yahoo! PPC service slow and hard to use, whilst Microsoft's service has been praised, yet limited by market coverage.

In the long term the combination of these 2 search services will mean a further focusing of search through a few routes. The impact on the search market will be mostly felt in the US where the combined strength of these companies will impact nearly 30% of the market, yet in many other countries, Google's complete dominance of search activity will not be greatly affected.

The further reduction in search competition is a shame, but it should be a benefit for PPC advertisers to use the better AdCenter system for non-Google search services. It's also a tragedy for Yahoo!, one of the pioneers of web search and directory services, that it has now lost its once powerful position in this market and will need to rely on its other consumer portal services. Over the years Yahoo! acquired some of the original leading players in web search, such as Inktomi and AltaVista, but some of this technology - if it was developed over recent years - may now help to evolve the quality of the Bing search engine.

For Microsoft, this move is what it has been waiting for and gives it the best opportunity to take on Google for greater market share of search. Whether they can use the share that they will get from Yahoo! in the USA to their advantage and to innovate and grow their user base remains to be seen.

Of the many news articles and comments that have followed this announcement, Danny Sullivan has written A Search Eulogy for Yahoo! and Search Engine Watch has highlighted the advantages for search advertisers.

As reported by the Sydney Morning Herald, Microsoft's new Bing search engine is targeting regional users through the home page image that changes daily on the site. These images - often of stunning natural scenery - are being adapted for different countries, with the Australian version of the site including images of events such as the Bledisloe Cup and the Darwin Beer Can Regatta.

These, and other images, may be displayed to coincide with national events, in the similar way that Google sometimes revises its logo design for a landmark date. In addition, a number of 'hotspots' on the images appear as a mouseover function, which then takes the user into the search engine results for some content related to the image.

Although Bing's daily changing search page image is an attractive reason to visit the site, the ongoing use of the service will be more dependant on the quality of the search results, and although Bing is adding some new innovations to the service, it will remain an uphill struggle to draw users away from Google on a regular basis, when 'googling' has become an accepted part of website usage.

Further new developments from Yahoo! have been reported widely in the press, including by the BBC. Available in the US initially, Yahoo! has changed its home page to give users a new, customisable format which lets them link to third parties like Google and Twitter. The aim is to make Yahoo! a stronger destination site that will provide users with a starting point for their web experience and thereby increasing visits to the Yahoo! site in the face of increasing competition, particularly following the recent launch of Microsoft's new Bing search tool.

The focus on the new interface is on personalisation, with the most notable change being a bar on the left hand side of the page, called My Favorites. Users can customise their links to Yahoo! here, as well as to other services they use the most from news to social networks to email to movies. While there are over 60 of these applications at the moment, consumers can add their own by typing in web addresses.

The BBC articles reports that Yahoo! has described the overhaul as the most "radical" and "fundamental" make-over of the site since it began more than a decade ago. Changes to its front page were announced back in October 2007 and the company began testing with users around a year ago. Yahoo's front page is seen as vital to the company's future and is regarded as prime real estate because it serves as an entry point for users, and as a result commands premium advertisement prices.

The Wall Street Journal reports that Yahoo! is due to launch its Search Pad tool in the coming week. This is a new search feature the company has been developing which aims to help users store and organize their search results, including the ability to save results and take notes on web listings they want to revisit — much the same as Google's personalised search function.

Search Pad is designed to detect when users might be conducting research-related searches based on patterns in their search queries, such as sequential searches for holiday or weather related terms. It then asks the use if they want to start saving the results, and if so, saves the links a user clicks on a separate screen where they can also jot down relevant notes. Users who are then logged in can access their links and notes another time or share them with friends.

Although this is an interesting development for Yahoo! it may come too late, following Google's system and the recent interest in Microsoft's Bing search engine, although it does help to raise the awareness and interest in personalised search tools. However, with more rumours about a tie-up with Microsoft as well, Yahoo! could see this tool get overtaken by events.

Ever since Googe introduced the Quality Score as a core factor in the AdWords PPC system, it has become an issue of some confusion and debate in terms of how it works and the impact that it can have on the bid management of a campaign. Google's AdWords Agency blog has been running a series of 'facts of the week' posts, which help to clarify or dispel some of the myths about how the Quality Score works and the impact that it can have.

Examples of recent facts covered have been: A higher bid will not improve your Quality Score; Quality Score does not suffer when your ads are paused or showing infrequently; Restructuring your account does not cause you to lose your historical Quality Score information. The explanation of these issues can be found in the blog and further facts will be published in coming weeks, all of which can be accessed through the link above, or by using the Quality Score label in the Google blog.

As Google continues to roll out the new interface for the AdWords management system, they are also responding to feedback on issues with the system. Their AdWords blog provides the latest update on improvements being made, not least the slower load time of the new interface and the difficulty in viewing all the columns on smaller screen resolutions.

Regardless of these issues, the new tools provided by the interface are welcome and, once adjusted to the new layout and structure of the account management, this has been a positive move. Google continues to provide good help files and online support for users of the new interface, through their blog, web help pages, videos and webinars.

The new July issue of the monthly Web Marketing newsletter has been published, covering some of the recent stories on web search and online marketing trends.

This month's edition looks at Microsoft's launch of Bing, its new a 'decision engine', which is designed to "empower people to gain insight and knowledge from the Web". It also reviews the release of Google's Wave, the new collaborative communications platform which has the potential to create massive workplace and communication efficiencies. Finally, this edition covers tips on how to use email-marketing campaigns as a powerful online marketing tool.

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