Image via CrunchBase
Two parties need the tie-up announced last week between Microsoft and Yahoo not to fall flat on its face almost as much as Steve Ballmer and Carol Bartz. One is the British consumer and all the companies that want to reach him or her. The other, oddly, is the senior management team at Google. Even more bizarrely, they both need it to succeed for the same reason: competition.
Google has a stranglehold on the UK. It has arisen not as a result of the company turning away from its oft-quoted mantra of "Don't be evil" but the combination of the dotcom crash, which saw potential rivals all but exit the UK market; the timing of BT's push to get broadband to the masses, which coincided with that exodus; and the English language, which meant the UK has never really developed its own web but piggybacked on the States'.
Britain is the world's fourth-largest advertising market - albeit to be passed by China this year - and in terms of the percentage of ad revenues spent online the UK is the world's most advanced market, with £1 in every £5 of media budgets going on the web. Of that, paid-for search advertising takes the lion's share and most of that cash finds its way to Google, with 90% of the search engine traffic in the UK. And if you do not have a well-known brand, roughly two out of five visits to your site will come from a search engine - making Google, in effect, the gatekeeper to the UK audience.