Last month saw what seemed to be a significant milestone in the battle for search market share as Bing broke the 30% mark by powering 30.01% of U.S. searches with 14.32% coming from Bing.com and 15.69% coming from Bing-powered Yahoo Search. Google saw its lead decline from 66.69% to 64.42% in just the month of March alone. These numbers, provided by Hitwise seem to indicate that there could finally be a trend towards Google actually having search competition in the near future.

The numbers are essentially the same for Yahoo as they were back in 2005 when Microsoft muscled its way into the search market by launching Bing. However, what may give Google some pause is the fact that Google has seen an overall decline of roughly 10% of market share since the two merged services back in August 2010, a period of only 6 months. While it?s highly unlikely that we?ll see some dramatic sea change in competition within the next year, it hasn?t stopped some from predicting rather outrageous outcomes. Courtesy of Mashable.com, case-in-point:

So by this logic, Google would be overtaken by early next year, which to put it kindly, is bunk. While Bing has made inroads, the merger with Yahoo has ben anything but seamless. News from today puts some of the starry-eyed projections into perspective. From TechCrunch, Yahoo’s search revenue shortfall for early this year continues, and now Microsoft and Yahoo are passing the blame. The numbers don’t look good:

This is the data since Microsoft took over Yahoo?s U.S. search advertising in return for 12% of Yahoo’s search revenues, with the red line indicating Yahoo’s revenue taking the 12% into account. So even though the merger seems to indicate some increase in market share over the last two quarters, the ad revenue has declined substantially. While Bing and Yahoo may claim that adding the human element makes their paid ad relevancy for search terms better, the data seems to indicate that Google’s algorithm (i.e. Quality Score) is still the best method for getting people to click on an ad, and thereby generate revenue. Perhaps any qualms Yahoo had about AdCenter’s performance versus AdWords back when they chose which company to outsource search to was eased by the magic word “scale”. So far, it appears that the “scale” promised by Microsoft hasn’t made up for lesser platform quality.