Microsoft's Bing gains on Yahoo, Google

The Bing homepage in an image courtesy of Microsoft.

SAN FRANCISCO (Reuters) - Microsoft Corp's market share of the U.S. Internet search market increased modestly in June, the first month that it fielded its new Bing search engine, according to the latest data from research firm ComScore.

Microsoft captured 8.4 percent of U.S. Internet searches in June, up from 8 percent the month before, largely at the expense of rival Yahoo Inc, whose market share fell to 19.6 percent in June from 20.1 percent in May.

Market leader Google Inc's share <GOOG.O was unchanged from the prior month at 65 percent.

"Given all the publicity and advertising around Bing, we were expecting a month-on-month increase," said Citi analyst Mark Mahaney, in a research note issued soon after the figures were published.

"But we think it's too early -- need three to four months to call a trend -- and the June move wasn't material enough to make any definitive statements as to whether Bing is a search market share game changer," said Mahaney. "We continue to view Bing as a very solid product, but one facing a very large uphill battle."

Microsoft has been pouring investment into its money-losing online services business in an attempt to counter Google's dominance in the Internet search market.

There is still a possibility that Microsoft will strike a partnership with Yahoo to combine their online advertising strengths, after Microsoft's aborted attempt to buy Yahoo outright last year.

Microsoft shares rose 3.1 percent to $23.83 on Nasdaq. Yahoo and Google shares also rose.

(Additional reporting by Bill Rigby in Seattle)

(Reporting by Alexei Oreskovic; Editing by Derek Caney and Gunna Dickson)