And as consumers pick up new PCs this Christmas shopping season with Windows 7 on them — and Bing search toolbars — Microsoft’s search share should continue to rise. (Yes, people actually use those things.)
Brian Pitz of UBS wrote in a note yesterday:
Holiday season PC refresh cycle could accelerate MSFT toolbar gains
At our Media and Communications conference last week, Yahoo! CEO, Carol Bartz, noted that the loss of toolbars was partially responsible for Yahoo!’s recent search losses to MSFT.
In Nov, Yahoo! lost 65MM toolbar searches Y/Y while Bing picked up roughly 67MM in the same period. Bing began distributing its toolbars through PC manufacturers such as Dell (formerly GOOG), Acer and HP (both formerly Yahoo!).
As toolbars refresh via consumers replacing PCs this holiday season as well as replacing Vista with Windows 7, we expect Microsoft’s toolbar search growth to potentially accelerate in 2010.
Why does this matter? Henry Blodget explained last week:
It means that we won’t view Bing’s gains as meaningful or important until Microsoft demonstrates that Bing is growing organically, through people switching search engines, without buying market share through toolbar partnerships and other distribution deals.
Why doesn’t growth from distribution deals count?
Because anyone can buy market share.
If we had billions of dollars to blow on distribution deals, the Business Insider could gain a few percentage points of search market share, too. But that wouldn’t mean we had a sustainable, profitable search business with a bright future.
See Also: Bing crushes Yahoo again in November