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Microsoft wishes it could be a Google number two

Second place wannabe plays $5bn losing game

Microsoft's hopeless pursuit to become the world's biggest search giant took a blow from an unlikely source yesterday.

The company's senior online audience biz veep Yusuf Mehdi confessed that once Microsoft closes its Yahoo! ad deal, the vendor will - by default - become "a credible number two," in that market.

He told Reuters on Tuesday that Microsoft hoped to see a reversal of fortune with its web ambitions. Especially seeing as the firm has lost over $5bn in the past four years in its efforts to become Google the internet kingpin.

"Really now, the goal is about share gain. If we grow share, we will grow our way into profitability, and we have confidence we can do that," said Mehdi, who added he was confident Microsoft would start to see some cash rolling in.

"There's no question we intend to make a profit," he said.

According to ComScore stats Microsoft currently holds 10.7 per cent of the US search marketplace, putting it in third place behind Yahoo! with 17.3 per cent and Google's hefty 65.7 per cent share.

Of course once Microsoft has scooped up Yahoo!'s troubled search estate, the company will grab close to 30 per cent of that market.

"At 30 points we are now a credible option, so that number matters," said Mehdi.

"The nice thing is we can say [to advertisers] you can be close to 30 per cent share in one easy buy. That 30 per cent carries a lot of weight in the marketplace."

Hitting that mark is, however, subject to US and European regulators approving Microsoft's bid to buy Yahoo!'s search engine business.

But 65.7 per cent share is whole lot beefier agreed Mehdi.

"Ultimately we want to be a major player at scale, so we're going to have to grow against Google at some point," he said.

But "we're still outmanned and outgunned by Google, they still have way more engineers than we do." ®

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