Following on from our last post, we first launched the Web Marketing Workshop business 10 years ago this month in the UK. It was first called Web Search Workshop and focused on SEO strategies for business websites, but this business then became a subsidiary of the main Web Marketing Workshop business, which was expanded to cover the growing needs of marketing a website to drive visits, enquiries and sales.

Over the past 10 years, this business has grown in terms of the customers supported, the techniques implemented, and the opportunities being targeted on the web. The online landscape has changed quite considerably, as have the options and challenges facing business websites, not least of which is the higher level of competition and the more restricted focus of search marketing through Google.

We've listed some of the things that were happening 10 years ago this month and we're looking forward to the challenges of the next 10!

The Sydney Morning Herald has published an article about Google action in suing Pacific WebWorks, a US company that is alleged to have created a scam advertising campaign that promised "up to $978 a day working from home". However, all that job seekers got in return for their application was a recurring bill on their credit cards and it's claimed that thousands of people have been duped into thinking they were applying for work with the search company.

In reality, the scam is simply selling a kit that claims to show recipients how to make money from home with Google. Buyers' credit cards are then charged with ongoing fees, while the job seeker receives nothing. Because the logo is displayed prominently on the ads, Google claims the unaffiliated websites are misusing its trademark to deceive unsuspecting consumers, many of whom have turned to Google to lodge complaints and ask for refunds.

A Google spokesperson said: "Misleading ads try to take advantage of consumers in the midst of a difficult economy, and as the economic situation has worsened, the problem has only grown. As far as we can tell, thousands of people have been tricked into sending payment information and being charged hidden fees by questionable operations".

As reported widely in the press, including by the BBC and The New York Times, Google has reported its highest quarterly profit for July-September, at US$1.64bn, which is up by 27% on the same period last year. At the announcement, Google's management claimed that the Internet advertising market is now coming out of the recessionary period, although it has always performed better than other advertising sectors in terms of annual growth rates.

Google's revenue for the three-month period was $4.38bn, which was well ahead of analysts' expectations of $4.24bn. The company also announced some new initiatives, including sales of electronic books through a new electronic editions service, which would compete with the likes of Amazon and their new Kindle product.

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.

Closely following the publication of Google's and Yahoo!'s financial results for the last quarter comes Microsoft. Widely reported in the press, including by The Wall Street Journal, the software giant posted a 32% drop in profit and the first decline in quarterly revenue in its 23-year history as a public company, due to the global recession having an impact on nearly every segment of their business.

Microsoft has blamed the 16% drop in sales for their Windows software on the reduction in the PC market within the consumer and business sectors, although there may also be an element of customers now waiting for the new improved version of Vista to appear before the year end.

More notably for Microsoft's Internet-focused business was the more than doubling of operating losses from the online services division, to US$575 million. Microsoft is still desperate to improve its competitive position in Internet search and advertising against Google, but has made little progress by the most important measures. The company has continued to hire within its Internet group, even as it has made staff cutbacks elsewhere in the company, and clearly hopes to see a turnaround in this sector soon, but continues to suffer from a low, and declining, share of the search market.

Both Google and Yahoo! have recently published their quarterly financial results, with some contrasting fortunes as the economy starts to have an impact on the search business.

Google released their results last week which were widely reported in the media - including by Information Week - and they were slightly better than analysts expected. Revenue for the first-quarter of 2009 was US$5.51 billion, up 6% year-on-year but 3% down on the last quarter of 2008. Their earnings-per-share figure was also better than anticipated ($4.93) which indicated that cost controls are working and the company is coping with the downturn so far.

Yahoo!'s quarterly results met the expectations of the market and the company said that economic conditions remained challenging, as revenue from advertising on Yahoo! websites and its partner websites declined during the first quarter of 2009. In the first quarter of 2009, Yahoo! generated revenue of US$1.58 billion, down 13% from the same period in 2008, with a net profit of US$118 million, down from US$537 million a year earlier. As reported by Reuters, Yahoo! also said it would cut 5% of its global workforce, following the earlier cuts announced in 2008.

As widely reported in the press, Yahoo! and Microsoft have started talks again over a possible search engine partnership, less than a year after Microsoft failed in a $US44 billion takeover attempt of Yahoo! At this stage there is no suggestion that a takeover bid is on the cards again, but the two companies are believed to be discussing ways they can link up their resources to combat the ever increasing market share of Google.

More information and possible outcomes from these talks will no doubt follow and there remains plenty of life left in this story.

According to ChannelWeb, Microsoft has said that it will further reduce the amount of time that search activity data is retained, as long as their competitors - Google and Yahoo! - do the same.

This relates to demands by the European Commission privacy panel that search engines should not retain information on users' search activity, which are currently held for 18 months. Microsoft has said that they would be prepared to reduce this time period to 6 months to meet the demands for search anonymisation. Google curently holds data for 9 months, and Yahoo! for 13 months. Whether the other search engines will agree to this shorter period remains to be seen.

The main search engines retain information on users' online search behaviour in order to target advertising and, as persoanlised search becomes more active, to retain historical data to help imporve search results. However, privacy critics say that keeping these records raise concerns about identity and activity patterns, which should be protected. Most searchers are probably unaware that their data is being collected in this way and if they choose to use persoanlised search, they are agreeing that their historical data will be kept for a period.

A recent article by The Economist is one of many that highlight the strength of the online marketing sector during the current period of economic crisis, with search advertising in particular looking to gain from the latest trends. Online advertising data from the US, the UK and Australia, all show that Internet advertising, and spend on search marketing in particular, continues to grow, although at slower rates than the previous few years.

Search advertising has become less of a speculative medium in recent years and instead provides highly measurable and responsive data from a focused marketing activity that gets excellent results for many companies. This makes it a surer option when advertising budgets may be getting cut back and therefore further growth in this sector is likely over the next few years.

The opportunities for advertising through video channels, like YouTube, and social networking sites like Facebook and MySpace are also seen as good opportunities, although these have yet to prove themselves in the same way as search. That's because these channels are used in different ways to search - more for socialising and viewing content, where advertising may be seen as more intrusive. Yet these areas are still seen as a good opportunity for developing new and creative techniques that will become more acceptable with users.

The recent decision by Yahoo! founder and CEO Jerry Yang to step down from the position has lead to much speculation about who might now replace him and what options are open to Yahoo! in the future. Advertising Age has published a good summary of the potential candidates for the job and the task that awaits them.

Yahoo! has had a tough year - repelling the advances of Microsoft, attempting a closer advertising deal with Google which hasn't paid off, and facing a declining market share and growing business pressures against its main rivals. The decision on who will lead the company into 2009 and to potentially turn the business around into a more effective market competitor will be an immensely important one. The outcome will determine whether Yahoo! survives in any meaningful way over the next 12 months.

Following the announcement back in June that Google was to provide search advertising through Yahoo!'s content network, the deal has been facing government review for anti-competitive concerns. After some delay and increasingly negative feedback from the regulators, as well as from some advertisers, Google has finally decided to step back from the deal and has announced an end to the agreement.

The origins of this arrangement followed Yahoo!'s aborted takeover by Microsoft and came at a time when Yahoo! was looking for support against this move. Now, however, Yahoo! is looking increasingly isolated as Microsoft are saying they are no longer interested in a deal except possibly a more limited search partnership Yahoo!'s stock has also fallen lower than when the takeover was in discussion and they look to be in an increasingly fragile position.

Yahoo! is still struggling in the search market and within the weakening US economy as net profits in the third quarter of 2008 are reported to be at US$54m, down from US$151 a year before. This was from a total revenue of $1.78bn, which was just 1% up on the corresponding period in 2007.

As a result, about 10% of Yahoo!'s global workforce (about 1,400 people) will be laid off. This news has, not surprisingly, received wide media coverage - including by the Sydney Morning Herald - and comes after the announcement earlier in the year by Yahoo! that an initial 1,000 jobs was also to be cut.

The deepening troubles at Yahoo! also come just over a week after Google reported their third-quarter results which exceeded analyst expectations - revenues were $5.54 billion, up 31% compared to the third quarter of 2007 and an increase of 3% compared to the second quarter of 2008. Profits jumped 26% to US$1.35bn, up from US$1.07bn in the 2007 quarter, which indicates that the company is continuing to grow despite the wider economic problems in the US and worldwide.

A recent news story in the New York Times reveals plans by Microsoft to open 3 new research centers in the UK, France and Germany to improve its Internet search technology. Described as a vote of confidence in the European economy, it also indicates Microsoft's ongoing plans to close the gap with arch-rival Google.

The new 'centers of excellence' will be in London, Paris and Munich, employing several hundred people. The intention is that the new R&D work conducted in Europe will help to improve Microsoft's ability to run Internet searches and to attract a larger share of the search market and therefore the advertising revenue that comes with it, after its failed bid to acquire Yahoo meant that the option of buying share is currently closed.

According to comScore, Google accounts for nearly 80% of Internet searches in Europe, compared to their 60% coverage in the United States. In contrast, Microsoft has barely 1% of the European search market and in some countries it even trails local search engines. In addition to working on improvements to Microsoft’s existing search technology the European centres are also said to be focusing on new types of searches, including queries from mobile devices and searches involving pictures and video.

The Microsoft / Yahoo! saga continues with a new approach by Microsoft to buy Yahoo!'s search business. As reported by The New York Times, the new offer marks a formal alliance between Microsoft and Carl Icahn, the billionaire investor who has been trying to oust Yahoo!'s board and creating an increasingly hostile and aggressive approach to achieve his - and Microsoft's - desired outcome.

Yahoo! quickly rejected the new offer and the board, who are defending their own positions, appealed to shareholders to reject the approach as a bad move for Yahoo! This latest move is likely to reach a showdown at the annual shareholder meeting at the start of August. Yahoo’s board apparently indicated to Microsoft on Saturday that it was willing to sell the whole company at $33 a share, which was the price first offered by Microsoft back in May, which Yahoo had rejected.

More details about the latest negotiations are included in the article and this story is bound to generate much more coverage and comment until such point as a definite outcome is achieved.

Following their failed attempt to buy Yahoo! over the past few months, Microsoft are looking at new ways to develop their online market share and web technology skills through acquisition. Although top executives were quoted in the Financial Times only last week saying that they would not be pursuing a spate of acquisitions - including rumours of Facebook and AOL now being targets - it hasn't taken them long to set their sights elsewhere.

This week Microsoft have announced their purchase of Powerset, a semantic search engine based in Silicon Valley. The news has been widely reported, including by Venture Beat, and the price being paid is over $100m which could be good value for money if the technology can be developed and used to Microsoft's advantage ahead of similar work by Google.

Semantic search is seen to be the next big development within search, whereby the search engine will attempt to understand the searcher's typical requirement based on the search terms being used and so display more relevant results to suit users' needs. Google is working on this technology but may be some way off launching a workable model, so if Microsoft have assessed this new purchase correctly and can take advantage of the specialist skills that come with the company, they could steal a march on Google in the future.

Not surprisingly, the Microsoft - Yahoo! story is unlikely to go away for some time and there are still possible discussions and initiatives to be developed by either party to get to their ultimate objective. As widely reported, including by The Sydney Morning Herald, Microsoft are apparently talking to Yahoo! again about some form of joint partnership, partly to keep the door open to an eventual takeover but also to block any moves that Google may be trying to fill the space of the abandoned acquisition attempt.

Yahoo! is also having to keep an eye on a potential proxy fight from shareholders, led my billionaire investor Carl Icahn who has criticised the Yahoo! board for their handling of the Microsoft offer. The rumours are that Microsoft are discussion some form of joint advertising arrangement with Yahoo!, based on search advertising or targeted display advertising, to try to ward off a stronger partnership being formed between Yahoo! and Google.

There's almost an inevitability that the 3 main players within the search market will merge in some format eventually -and most likely a Microsoft-Yahoo! deal - which will not be good news for the overall market and advertisers, but probably a natural progression for the runners-up to try to tackle Google's strengthening monopoly.

The ongoing saga of Microsoft's attempts to buy Yahoo! came to an abrupt halt on Saturday when a top level meetings between the executives of both companies failed to reach an agreement. Despite Microsoft upping their bid price to nearly US$50bn, Yahoo! still held out their position that the bid was undervaluing the business and so Microsoft finally withdrew their offer.

Shares in Yahoo! fell as news of this development reached the markets, and the question now remains - what will Yahoo! do now? Will they continue to pursue the other business alignments that were being investigated during the takeover offer period, such as with AOL, or try to build on the recent advertising trial with Google?

It's no doubt good news for the web search market that Microsoft hasn't pursued this acquisition to a successful conclusion, but it now leaves Yahoo! in a weaker position from which they need to develop their business and services to help them maintain their position in the market, and to protect themselves from other predatory takeover attempts. Microsoft are also likely to be reviewing the outcome and deciding where to spend their cash now and it may eventually come about that another purchase attempt will be made if Yahoo!'s value takes another hit in the future.