Microsoft/HP Deal: Grazes Yahoo, Misses Google (MSFT, HPQ, YHOO, GOOG)

JP Morgan’s Imran Khan runs some numbers on the impact of Microsoft’s (MSFT) new search deal with HP (HPQ), which replaces the PC giant’s old pact with Yahoo (YHOO). Conclusion: Pretty much a non-factor all the way around.

  • Microsoft may gain up to 1% of search market share — but that’s based in part on an assumption that an increasing number of PC users will use their machines’ default search engine. Khan doesn’t explain his rationale for that.
  • What ever share MSFT does gain will come from Yahoo, but Yahoo’s margins should increase, since they no longer have to fork over acquisition costs to HP.
  • Not mentioned once in Khan’s report: The impact of the deal on Google — because there won’t be any.

See Also: Microsoft’s Non-Google Killer

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