Google Will Dominate Search in Japan Through Yahoo Deal

  |  July 28, 2010   |  Comments

The decision will come as a blow to Microsoft as it continues attempts to scale its Bing engine worldwide.

Yahoo Japan will partner with Google to provide algorithmic and paid search technology across Yahoo properties, the company announced yesterday. The partnership will make Google responsible for around 90 percent of search queries conducted in Japan, according to data from comScore, representing a huge jump from the 30 percent it currently attracts.

The announcement will come as a blow for Microsoft and its Bing search engine, with which it is desperately attempting to wrestle search market share from Google on a global basis.

California-based Yahoo currently owns a 35 percent stake in Yahoo Japan, but the company is operated independently of its U.S.-based sibling. As a result the company was free to make its own decision regarding which search provider to partner with, and subsequently opted not to follow Yahoo in outsourcing search technology to Microsoft, as it has for its own global search products.

In a statement e-mailed to ClickZ News, a Yahoo spokesperson said the company had to "amend its agreement" with Yahoo Japan as a result of the decision, but that it does not anticipate it will have an impact on its business. "We will provide support, as required by our agreement, for the search experience Yahoo Japan has chosen for its business.... This decision by Yahoo Japan does not impact the global rollout and implementation of the Yahoo search alliance with Microsoft, except in the Japanese market," the company said.

Prior to reaching that agreement with Microsoft, Yahoo attempted to strike a deal with Google, which was ultimately blocked by regulators in the U.S. and Europe on grounds that it would hand too much market influence to Google. However, Japanese regulators don't appear to share those concerns, with Yahoo Japan claiming authorities there have already given the arrangement the green light.

Currently, Japan is one of few global markets in which Google does not dominate the search space, attracting around 38 percent of queries in March compared to Yahoo's 51 percent, according to comScore. However, the relationship will now hand Google control of almost all Japanese searches, drastically increasing its market presence there overnight.

Commenting on the announcement, and showing clear frustration at Japanese regulators' attitude towards it, Microsoft's General Counsel Dave Heiner wrote in a blog post, "This agreement is even more anti-competitive than Google's deal with Yahoo in the United States and Canada that the Department of Justice found to be illegal.... It means there will be no search competition in Japan and that Google will end up controlling all personal search information for all Japanese consumers and businesses."

Though he doesn't cite sources of the data, Heiner notes in his post that Google currently accounts for around 51 percent of paid search advertising in Japan, and Yahoo Japan accounts for 47 percent. Combined, therefore, Google will account for over 98 percent of paid search advertising in the country following completion and implementation of the agreement.

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ABOUT THE AUTHOR

Jack Marshall

Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011. 

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