Andrew McCormick, Media Week, 05 February 2008, 10:05am

UK agencies warm to idea of united Microsoft and Yahoo

UK search agencies would welcome the challenge to Google that a merged Microsoft/Yahoo search engine would offer, according to senior industry sources.

Google's dominance of the UK search market is even greater than in the US - it accounted for 81% of all internet searches in the UK in December, compared to 59% of US searches, according to research firm comScore.

Jim Brigden, chief executive of The Search Works - Google's biggest UK client - said his company would certainly welcome competition to Google on a European basis.

He said: "[The proposed Microsoft/Yahoo merger] sounds like a compelling concept, but there's a long way to go and it would certainly be a couple of years before it would have any impact in Europe."

Andrew Girdwood, head of search at Bigmouthmedia, said a Microsoft/Yahoo merger would benefit clients.

He said: "Everyone wins if Google has more competition. The hope is that Microsoft plus Yahoo will equal three and while Google has expressed concern about the deal it has welcomed competition before.

"It's great news for us. To get Yahoo's level of traffic and Microsoft's rates of conversion will make more money for our clients."

Tony Samios, chief operating officer at Steak Media, said: "At the moment it's a three-horse race, but two of the contenders aren't strong enough to compete. Finally, Google is going to get some competition."

Microsoft and Yahoo's UK operations were remaining tight-lipped about the proposed $44.6bn take-over announced on Friday.

However, Google's managing director for UK sales, Mark Howe, agreed with suggestions that Microsoft could now attempt to exert the same sort of influence over the internet that it did with the PC.

He told Media Week: "Competition stimulates the market and we welcome fair and honest competition. Yahoo has had a tough time of it of late when it comes to search and it's not healthy to have weakened colleagues."

Microsoft, meanwhile, has ramped up its rhetoric through its corporate blog. "The combination of Microsoft and Yahoo will create a more competitive marketplace by establishing a compelling number-two competitor for internet search and online," the company wrote.