Yahoo Turns to This Competitor for Help

Yahoo (NASDAQ:YHOO) may be everybody’s favorite underdog, but it’s an underdog nonetheless. Between December 2010 and December 2012, the company fell from being the number two search service, with 16 percent of the market, to number three, with 12.2 percent. Stepping on its toes was Bing, powered by Microsoft (NASDAQ:MSFT), which increased its share of the search market from 12 percent to 16.3 percent over the same period.

The king of the jungle is, of course, Google (NASDAQ:GOOG), but the company seems to have hit a ceiling at about two-thirds of the search market. While Yahoo and Microsoft swapped spots in the top three and moved by 4 points in either direction, Google ticked just 0.1 points higher for a December 12 market share of 66.7 percent.

Like any good triad, the relationship between these three companies is both competitive and complimentary. In 2010, Yahoo and Microsoft signed a 10-year agreement in which Yahoo would use the Bing search engine to support its varied web services, and the two would share the search revenues. Ostensibly, the arrangement would pool their resources against Google, better the user experience, and increase cash flow.

But like many partnerships, the Microsoft-Yahoo alliance has failed to live up to expectations…