In what will surely cause a firestorm of controversy in the search arena today, the Nielsen Co. is reporting that–for the first time–Bing has pushed past Yahoo in August to become the No. 2 search engine in the United States.

In its report for August, Nielsen–one of many entities that releases search market share results–said the Microsoft (MSFT) search service had a 13.9 percent share of search volume in August, compared to Yahoo’s 13.1 percent.

That contrasts with the July report from comScore (SCOR), which shows that Bing had an 11 percent share and Yahoo (YHOO) had a 17.1 percent share.

According to comScore, Google (GOOG), of course, remained the Yertle the Turtle of all search, with a 65.8 percent share.

Nielsen reported a similar number, with a 65.1 percent share for Google. That’s up 0.9 percent month over month and 0.5 percent for year over year.

Bing is up 0.2 percent month over month and 3.2 percent compared to a year ago. In contrast, according to Nielsen, Yahoo is down 1.1 percent for the month and 2.8 percent for the year.

AOL (AOL) and Ask.com make up the other four percent of the market.

Here is Nielsen’s month-to-month chart and also its official press release:

Bing Overtakes Yahoo! as the #2 U.S. Search Engine

According to new research released by The Nielsen Company, for the first time, MSN/Windows Live/Bing Search overtakes Yahoo! as the #2 search engine in the U.S., with a 13.9% share of search volume in August 2010, a 0.25% delta increase from last month.

Although Google saw little change in its month-over-month search volume, it still dominates the search market, accounting for 65% of all U.S. searches.

Yahoo! followed Google and MSN/Windows Live/Bing Search with a 13.1% share of U.S. searches, falling from a 14.6% share in July 2010 to 13.1% (a 1.2% delta decrease or an 8% relative decrease).

In terms of a year-over-year comparison, Google has seen little change in its share of search while Yahoo! has seen a small but steady decline, going from a 16% share to 13.1% (a delta drop of 2.9% or a relative drop of 18%). MSN/Windows Live/Bing’s share has grown from 10.7% in August 2009 to 13.9% (a delta increase of 3.2% or a relative increase of 30%).

Bing-powered search

Microsoft and Yahoo announced a search deal in July 2009 where Microsoft would start powering Yahoo! Search while Yahoo! became the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Microsoft Bing officially started powering part of Yahoo! searches starting in August 2010. If we combined Bing-powered search in August, it would represent a 26% share of search.

About our methods

Nielsen’s search data only counts genuine intentional searches that people type into a search box. It does not include non-intended or “contextual” searches that are automatically generated by search engines based on a person’s browsing behavior.

Old fogies like Yahoo (YHOO) and Answers.com have been at this for a while. But in the past 12 months or so, everyone wants in.

Google (GOOG) bought Aardvark earlier this year, and Facebook is working on its own flavor of so-called “social search” (which means that human beings ask questions, and other human beings answer them). Start-up-of-the-moment Quora was supposedly valued at $86 million before it ever opened its doors. Etc.

Okay. But why is Ask.com adding a questions feature to its offering?

Easy: Because it’s tried everything else, and there’s no reason not to. IAC’s (IACI) search unit has had less than five percent of the domestic market for a very long time, even though it has gone through multiple CEOs, tech overhauls and branding campaigns.

Don’t want to be reflexively negative here (really!). So best to say that if this gambit moves the needle, it will be a pleasant surprise.

While it might seem a simple tweak, adding permanent contextually relevant left-hand navigation to its results pages is a noteworthy move for Google, which is adopting a design element first implemented by its rivals.

Ask.com debuted it in 2007. Microsoft’s (MSFT) Bing launched with it last June and Yahoo (YHOO) added it a few months later.

Not that the company will admit to copping the left-hand refinement menu from any of them. Asked by VentureBeat if its redesign was inspired by the competition, Google (GOOG) senior user experience designer Jon Wiley said it wasn’t.

“I think really the biggest changes and sources of innovation really come from an analysis of what our users need,” Wiley said. “We spend a lot of time just going back to search options or universal search. The way that people have been using those particular tools and features gives us a lot of insight.”

Hmm…

And what of the changes to Google’s logo? They’re largely unremarkable: The elimination of drop shadows and a punching up of its colors. Said a company spokesman: “The refined logo exemplifies our thinking and our design process. We took the very best qualities–personality and playfulness–and distilled them into brighter colors, simpler shapes and softer gradients.”

Diller made the remarks at the Goldman Sachs Technology and Internet Conference today in San Francisco.

Diller said IACI took a large cash position in the break up of the company into five public entities in anticipation of finding cheap companies to buy–but he says they didn’t find much to buy.

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“We’ve been asked a lot whether we’re open to consolidating transactions in the area of search. The answer is yes. And, it is unlikely that we would be the consolidator.”

– IAC CEO Barry Diller, Oct. 28, 2009

Turns out Barry Diller isn’t all that interested in selling off IAC’s (IACI) Ask.com search engine, “speculative” though its future might be. Speaking at the Reuters Global Media Summit in New York on Wednesday, Diller said he’d rather partner with another search company than divest Ask outright.

Evidently that’s the message he’s been giving to any party that’s inquired about buying Ask. “The people who called us were on exploration missions, on a stand-alone buy as an asset,” he said. “That is different than having conversations with other people in the vineyard, in the area of search.”

Now, BoomTown likes a good jingle as much as anyone else, but this new one from Microsoft’s Bing search service is sticking in my head like a piece of chewed gum.

Shot at Keith Valley Middle School in Horsham, Pa., it uses 400 very adorable sixth graders, who are dragooned into one very large “Bing Goes the Internet” dance–complete with logo wear. The kids rock, the advertising jingle not so much.

They are using the winning entry in the Bing jingle contest, by Jonathan Mann.

I must say, regretfully, stick with vampires, Microsoft (MSFT).

In any case, here’s the video, as well as one of the super-duper, migraine-inducing “I Do! I Do!” television commercials from Ask.com–a unit of InterActiveCorp (IACI)–below it:

“The big steps we’ve been out and after for the last several years in search [have] not been achieved and you’d have to say that the future is speculative. We’ve been asked a lot whether we’re open to consolidating transactions in the area of search. The answer is yes and it’s unlikely that we would be the consolidator.”

– IAC CEO Barry Diller

If Barry Diller is looking for somewhere to unload IAC’s Ask.com search engine, he’d be wise to consider Microsoft–if he doesn’t have that in mind already. Analysts reflecting on Diller’s recent remarks about Ask’s “speculative future” say Microsoft is the most likely buyer if IAC (IACI) is truly serious about dumping the little search engine that couldn’t.

Ask, analysts note, has about four percent of the domestic search market, which would give Microsoft (MSFT) a nice little bump up from the 9.4 percent market share it currently claims. And it certainly wouldn’t hurt that a Microsoft acquisition would undoubtedly mean the end of Ask’s relationship with Google (GOOG).

“Right now, Microsoft wants share so they could pick up those points from Ask,” Colin Gillis, an analyst at Brigantine Advisors, told Reuters. “Plus it has a double impact since Google powers Ask’s paid search.”

“The big steps we’ve been out and after for the last several years in search [have] not been achieved and you’d have to say that the future is speculative. We’ve been asked a lot whether we’re open to consolidating transactions in the area of search. The answer is yes and it’s unlikely that we would be the consolidator.”

– IAC CEO Barry Diller

If Barry Diller is looking for somewhere to unload IAC’s Ask.com search engine, he’d be wise to consider Microsoft–if he doesn’t have that in mind already. Analysts reflecting on Diller’s recent remarks about Ask’s “speculative future” say Microsoft is the most likely buyer if IAC (IACI) is truly serious about dumping the little search engine that couldn’t.

Ask, analysts note, has about four percent of the domestic search market, which would give Microsoft (MSFT) a nice little bump up from the 9.4 percent market share it currently claims. And it certainly wouldn’t hurt that a Microsoft acquisition would undoubtedly mean the end of Ask’s relationship with Google (GOOG).

“Right now, Microsoft wants share so they could pick up those points from Ask,” Colin Gillis, an analyst at Brigantine Advisors, told Reuters. “Plus it has a double impact since Google powers Ask’s paid search.”