In a few days, Microsoft’s (MSFT) Bing back end will begin handling some Yahoo (YHOO) search results, and by the end of the week Yahoo users in the U.S. and Canada should start seeing a “Powered by Bing” bug at the bottom of their search results pages. Once the North American transition is finished, Bing will power 5.2 billion monthly searches–about 31.6 percent of the U.S. search market, according to Microsoft. According to comScore’s latest search market metrics, it’s more like 28.1 percent–significantly better than the 11 percent share Microsoft currently claims, but a far cry from Google’s (GOOG) 65.8 percent.

Getting an accurate read on the tides of search market share these days is no easy feat given the interface changes being rolled out by the major players.

Consider comScore’s May search market report (see tables above; click to enlarge), which shows Microsoft’s Bing and Yahoo gaining share, ostensibly at Google’s expense. For the month, Yahoo gained 60 basis points for a share of 18.3 percent, and Bing 30 points for a share of 12.1 percent. Meanwhile, Google’s (GOOG) share declined 70 basis points to 63.7 percent.

While those numbers seem straightforward enough, they really aren’t, given some of the navigational ploys Yahoo (YHOO) and Microsoft (MSFT) have been using to boost their numbers. Slideshows and contextual search links have helped raise the share of both companies, but they need to be backed out of the data to get an accurate view of the sector, as J.P. Morgan (JPM) analyst Imran Khan explains.

“User interface changes continue to cloud the picture,” Khan said in a note to clients. “Google, Yahoo! and [Bing] all made notable changes in April and May, according to comScore. As such, numbers may not be directly comparable to past months. On a reported basis, Google lost ~70 bps of search share in May vs. April, while Yahoo! was the biggest gainer, up ~50 bps. Excluding the impact of all adjustments, Google gained ~30 bps of share, Yahoo! was down ~25 bps and Microsoft was flat.”

In other words, the numbers here do lie and will continue to do so until measurement outfits like comScore (SCOR) account for context-driven searches and slideshows. ComScore plans to do just that.

“[The] continued evolution of search and emerging innovations in how it is used to enhance user experience, calls for a thoughtful review of how we classify various types of searches, count them and report them,” Cameron Meierhoefer, comScore’s executive VP of analytics, wrote in a blog post released along with the company’s latest search stats.

“We want to ensure that we provide comprehensive and flexible measurement that meets the needs of the various constituencies in the digital marketplace,” Meierhoefer added. “As our thinking evolves, we will include relevant stakeholders in the discussion and clearly communicate our thinking and rationale to the marketplace.”

The timeline? “While we will maintain the current method through the end of the second quarter to avoid reporting disruptions, we will aim to implement proposed revisions in the third quarter, ideally starting with the release of July data in the first half of August.”

So perhaps it’s time to rethink ads like this:

True story. Last night I was in a room with a few bright people. Though the TV was on, no one was really paying attention. But when the commercial above came on, we watched it all the way through. Followed by this question from one of my fellow TV-watchers:

“What’s Bing?”

To be fair, it turns out that the person who asked this question is also paying $15 a month for an AOL (AOL) subscription. So we can’t argue that the question-asker is perched atop technology’s bleeding edge.

But if Bing is really going to claim 40 to 50 percent of the search market, it’s going to have to convert a lot of people who pay absolutely no attention to technology whatsoever. Like AOL subscribers.*

Then again, if you can point me to any TV ad campaign that has moved the needle for a search engine, I’d love to see it.

So would Microsoft (MSFT), I’ll bet.

*And yes, I’ve told a similar story before. Different people, though. I swear.

That puts it within two percentage points of Yahoo (YHOO), whose share fell to 14.1 percent from 14.5 percent and, heh-heh, within 52.7 percentage points of Google (GOOG), which also saw a decline from January to February. The company ended the month with 65.2 percent share, down from 66.3 percent in January.

It’s slow going, but Bing is clearly whittling away at both Google and Yahoo’s search market share. Of course, the flip side is that with Yahoo in decline, the search side of the Microsoft-Yahoo partnership isn’t showing all that much growth.

According to comScore’s (SCOR) January 2010 core search volume and market share data for the U.S.–as reported by J.P. Morgan’s Imran Khan, Bing’s share of the search market rose to 11.3 percent from 10.7 percent in December. Meanwhile, Google’s share fell to 65.4 percent, from 65.7 percent in December and Yahoo’s to 17 percent, from 17.3 percent. Not significant declines by any means (though Yahoo is down 21 percent year-over-year), but nice little breadcrumbs for Bing to snap up just the same.

Which is not to say that Microsoft (MSFT) will be able to parlay its advance into more meaningful gains. Certainly, it will continue to be dwarfed by Google (GOOG) for the foreseeable future. But perhaps not by Yahoo (YHOO), particularly given the discrepancies in their core search volume. In January, Bing saw its core search volume increase by 49.6 percent, up slightly from 49.4 percent in December. Meanwhile, Yahoo’s core search volume decreased by 8.9 percent, considerably more than the 1.9 percent decline it suffered in December.

“The launch we have been working on with China Unicom has been postponed,” a Google spokesperson explained.

The company offered no reason for the postponement, though it is obviously related to new uncertainties around its presence in China. Sources close to Google (GOOG) say the company simply felt it would be “irresponsible” to launch the phones in China at this time.

Google says it plans to hold meetings with Chinese authorities in “coming days,” though they’re not likely to be easy-going given recent messages from Beijing. This morning, a Chinese Foreign Ministry spokesman again stressed that foreign companies doing business in China must respect Chinese laws and regulations, adding, “Google is of course no exception.”

“We will be issuing a formal demarche to the Chinese government in Beijing on this issue in the coming days, probably early this week,” said State Department spokesman P. J. Crowley. “It will express our concern for this incident and request information from China as to an explanation of how it happened and what they plan to do about it.”

What they plan to do about it?

Not much, if yesterday’s comments from Beijing are any indication. Consider this report from Xinhua News, the official press agency of Chinese government:

… cyber attacks are a commonplace issue across the globe even if countries have been making every effort to combat hackers.

On Tuesday, China’s largest Internet search engine Baidu, which is also Google’s major rival in the Chinese market, suffered an hacker attack that paralyzed its website for more than three hours.

Microsoft’s CEO Steve Ballmer has said that “There are attacks every day …We’re attacked every day from all parts of the world and I think everybody else is too. We didn’t see anything out of the ordinary.”

So it’s far-fetched to blame China as a scapegoat for cyber attacks just because Google said something about that.

In addition, it’s quite natural for a multinational company to shift its market strategy or even pull out business from a certain area.

Since Google.cn was launched in January 2006, it has seen a continuous rise in its market share in China. But it is still unlikely for Google to rock Baidu’s status quo as a superpower in the Chinese search market.

Baidu and Google took 63.9 percent and 31.1 percent of shares, respectively, of China’s Internet search market in the third quarter last year, according to data from Analysys International, a leading advisor on technology, media and telecom industry in China.

While Google’s global share is over 90 percent, according to web analytics company Stat Counter.

Till now, Google’s real intentions to quit China are still not clear.

There is no sense blowing things out of proportion and turning a business issue into a political or diplomatic dispute.

Above all, Google’s decision is no bigger than a corporate action, no matter where the company comes from or how powerful it is.

Clearly, Beijing has no plans to compromise–at this point, anyway.

ComScore data on the search market are widely considered the industry standard and therefore more closely watched by Wall Street. Still, the big picture is clear: Google is not the competition, it’s the environment in which you compete. The IT industry used to say that about IBM (IBM), but today, the adage seems equally applicable to Google, which dominates the search market just as IBM once dominated the computer industry.

“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.”

Much has changed at Yahoo since May 17, 2006, the last time the company held an investor day gathering. In May 2006, Yahoo’s shares traded at about $30 and the company claimed 28.98 percent of the U.S. search market. Today, its stock is worth a little over $16 and its share of the search market has fallen to 18.8 percent.

Ugly declines, both of them. Fitting then, that Yahoo CEO Carol Bartz, speaking at the company’s first investor day gathering in three-and-a-half years, would describe the company’s future as “a journey back to respect.” “We are not here to wow you today,” Bartz said “We are here to intrigue you.”

What follows is a brief historical overview of Yahoo (YHOO)–“Yahoo was the big shining star, then wasn’t”–and then a redefinition of the company as that more intriguing entity to which Bartz referred earlier. “We are not a search company, we are not a display company,” she said. “We are a broad-based Internet company….We are the largest communications engine in the world.”

Communications engine? Sounds like a sneaky way of avoiding comparisons with Google (GOOG). Not that anyone makes them anymore.

Anyway, Bartz continues, playing up Yahoo’s scale, diversity of content and technology. “We combine amazing editorial with very sophisticated machine-learning,” she says. But what makes Yahoo most unique, says Bartz, is the company’s ability to learn from its mistakes. “We have fallen and we really want to get back up. If you haven’t had good times and bad times, you don’t know what you’re doing. We prefer the good times. We have passion to get back there. Today is the start of that.”

Asked during an earnings call Tuesday if IAC (IACI) would consider selling the search engine, Diller said it most certainly would. “We’ve been asked a lot whether we’re open to consolidating transactions in the area of search. The answer is yes,” he said. “And, it is unlikely that we would be the consolidator.”

Obviously.

So Ask is for sale. The question now is who wants it?

Asked during an earnings call Tuesday if IAC (IACI) would consider selling the search engine, Diller said it most certainly would. “We’ve been asked a lot whether we’re open to consolidating transactions in the area of search. The answer is yes,” he said. “And, it is unlikely that we would be the consolidator.”

Obviously.

So Ask is for sale. The question now is who wants it?

IAC (IACI) has rolled out Ask.Deals, a dedicated section for bargain hunters and coupon clippers. The site has its own tab on the search engine, but Ask is also featuring it prominently in regular search results: Plug in “cheap ipods,” for example, and you’ll have to work very hard not to end up in the new section.

Can’t hurt. Can it help? Ask has been mired at just under four percent of the U.S. search market for a long time and it seems unlikely that rejiggering its search results will attract new users in significant numbers. It is possible that Ask can boost click-through rates, and thus dollars, though, which would be nice.

Then again, Yahoo (YHOO) and Microsoft (MSFT) are trying variants on the same idea. And perhaps more tellingly, Google (GOOG) isn’t doing much with this stuff at all.

New metrics from Web analytics firm StatCounter show Bing’s share of the U.S. search market in September falling to 8.5 percent from 9.6 percent in August. Its share of the global market declined as well, slipping to 3.25 percent from 3.58 percent.

Microsoft’s (MSFT) new search partner, Yahoo (YHOO), also suffered a decline. Its market share fell to 9.4 percent from 10.50 percent in the U.S. and to 4.37 percent from 4.84 abroad. Meanwhile, Google’s (GOOG) September share rose to 80 percent from 77.8 percent in the U.S. and to 90.54 percent from 90 percent globally. (See chart below; click to enlarge.)

“The trend has been downwards for Bing since mid August,” StatCounter CEO Aodhan Cullen said in a statement. “The wheels haven’t fallen off but the underlying trend must be a little worrying for Microsoft.”

Mmm, I doubt it. While a month of slight decline might herald the beginning of a trend, it certainly doesn’t guarantee one, especially in search, where surges and declines in market share are quite common. Furthermore, we haven’t yet seen search metrics from Nielsen, comScore (SCOR), and Hitwise. And all three showed Bing gaining share in August, a month that Statcounter claimed shows the beginning of a downward trend.

• Week ending June 6: 3.43 percent
• Week ending June 13: 4.57 percent
• Week ending June 20: 5.35 percent
• Week ending June 27: 6.63 percent

“Looking at the weekly percentage of U.S. searches for Bing, the search engine has grown at an average weekly rate of 25 percent for the month of June 2009,” Hitwise explains. “Adding in Live.com and MSN Search along with Bing, the combined search engines have grown at an average of 16 percent during June 2009. Bing grew faster than the three other prominent search engines for the month.”

Impressive. But sadly, not enough for Microsoft (MSFT) to make real headway. Because Bing actually ended up losing market share during June, slipping to 5.25 percent from the 5.64 percent it had in May (click on chart below). Meanwhile, Google (GOOG) gained share, rising to 74.04 percent from 73.66 percent in May. And Yahoo (YHOO) gained as well, starting out the month with a 15.55 percent share and ending it with 16.19 percent.

J.P. Morgan’s Imran Khan offered an early look at market researcher comScore’s May 2009 core search volume and market share metrics for the U.S. this afternoon (to be publicly released tomorrow) and they show what search metrics always seem to show these days: Google’s share of the domestic market growing at the expense of its rivals (click on tables below to enlarge).

According to comScore (SCOR), Google’s (GOOG) share of the domestic search market rose to 65 percent in May, up from 64.2 percent in April. Its core search volume grew 42.5 percent, far exceeding the 40.6 growth in posted in the month prior. Meanwhile, Yahoo’s (YHOO) domestic core search market share slipped a bit, falling to 20.1 percent in May from 20.4 percent in April. Its core search volume for the month grew by 29.5 percent, down from 39.3 percent.

And what of Microsoft (MSFT)? It, too, suffered a decline. Its share of the domestic core search market fell to eight percent in May from 8.2 percent in April. Core search growth was also down at 24.9 percent from 25.7 percent in April. Clearly, Microsoft is still struggling to gain purchase in the search market. But, while these data don’t yet show it, Microsoft may have found some traction. As I noted last week, Bing has been generating a fair bit of interest, and that bodes well for some improvement in its position in the search market.

Not so difficult, apparently. As I noted yesterday, early data from market researcher comScore (SCOR) show Bing boosting Microsoft’s share of the search market to 11.1 percent from 9.1 percent since May 26.

Anyway…

Schmidt’s remarks recall a CNN interview he did earlier this month in the aftermath of Bing’s debut. Then as now, the Google CEO went to great lengths to tar Microsoft and its search products. “Microsoft has announced a Google killer search product about once a year for the past six years,” Schmidt said at the time. “And they need to offer a better product than the one they did last year. I think it’s too early to say with Bing how well it will do. They have some advantages because of the Windows monopoly where they can encourage people–in our view unfairly–to use Bing, but let’s see what the end users choose. We always start from the premise ‘what do the end users want’ and we continue to find in our studies that what Google offers is what they want.”

Not so difficult, apparently. As I noted yesterday, early data from market researcher comScore (SCOR) show Bing boosting Microsoft’s share of the search market to 11.1 percent from 9.1 percent since May 26.

Anyway…

Schmidt’s remarks recall a CNN interview he did earlier this month in the aftermath of Bing’s debut. Then as now, the Google CEO went to great lengths to tar Microsoft and its search products. “Microsoft has announced a Google killer search product about once a year for the past six years,” Schmidt said at the time. “And they need to offer a better product than the one they did last year. I think it’s too early to say with Bing how well it will do. They have some advantages because of the Windows monopoly where they can encourage people–in our view unfairly–to use Bing, but let’s see what the end users choose. We always start from the premise ‘what do the end users want’ and we continue to find in our studies that what Google offers is what they want.”