Yahoo, a Division of Microsoft Corp.
Why would Microsoft pay such a premium for Yahoo, given slowing growth in display advertising? The Nielsen Norman Group’s Jakob Nielsen has an idea or two. Here’s one of them: Web-mail-associated searches.
When they want to search, a lot of users go for the nearest ‘type-in place’ they can find. So if a search box is visible on the current page, that site will often get the query, and the ensuing bountiful revenues. Many users don’t even know how to get to the homepage of their favorite search engine.
“Thus, if Microsoft took over the email accounts currently served by Yahoo, it would get many of the searches done after people check their email (something that’s very sticky–users are reluctant to abandon their email addresses).
“The question, of course, is whether such accidental use of a search engine is as valuable as searches by more-determined users who go straight to their favorite search engine. Yahoo would know, since they serve both kinds of searches, but the numbers are surely kept as a state secret.”