Microsoft Will Have to Make Sales Force Changes to Sell Search Ads



Microsoft will now need to increase its sales force to sell search ads

In the prior parts of this series, we’ve been discussing the amendments to the agreement between Yahoo (YHOO) and Microsoft (MSFT) for their search partnership. We’ve discussed the changes that Yahoo will have to make. However, Microsoft—which had, until now, given the responsibility of selling search ads to Yahoo on PCs—will now need to take on more responsibility. Microsoft will need to beef up its sales force to sell its search ads.

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Microsoft’s Bing is ranked third in the global search ad market. According to a report from eMarketer and as the chart below shows, Bing’s share increased from 3.7% in 2013 to 4.2% in 2014. The increase in share was driven by the company’s partnership with Apple (AAPL) in 2013 and 2014. With the launch of iOS 7 in 2013, Apple replaced Google (GOOG)(GOOGL) with Bing on Siri.

Apple helped Microsoft gain search market share

In 2014, at the Worldwide Developers Conference event, Apple announced that Microsoft’s Bing will be the default search engine in the redesigned Spotlight search feature for the upcoming iOS 8 and OS X Yosemite. Bing replaced Google as Apple’s default search engine for Spotlight.

However, Microsoft faced a setback a few months back, when Facebook (FB) revamped its search offering as it stopped including results from its Bing search engine through the Facebook search. Earlier, Facebook’s search results also included links to standalone websites courtesy of Bing.

However, just like Yahoo’s Gemini platform, Microsoft will need to enhance its ad platform to provide relevant ads to its users through Bing search. To gain diversified exposure to Microsoft, you can invest in the iShares Dow Jones US Technology (IYW). IYW invests 9.5% of its holdings in Microsoft.

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