Search giants combine after 18 months of discussions
Microsoft and Yahoo have at long last reached an agreement on a combined search deal that will see the two companies mount a renewed assault on market leader Google.
However, the deal is far from the full buyout agreement touted by Yahoo last year, when then CEO Jerry Yang said: “the best thing for Microsoft to do is buy Yahoo,” adding that he would be willing to sell the whole company at any price, “whatever that price is.”
Instead, a new collaboration between the two search firms will see them combine elements of both their businesses in an attempt to gain ground on Google.
Microsoft’s newly revitalised
Bing search engine will now power Yahoo, becoming "the exclusive algorithmic search and paid search platform for Yahoo sites,” while Yahoo will take care of search advertising sales with its dedicated workforce.
The new search deal, which will last for 10 years, generating forecasted revenues of $500m (£305m) a year, is seen as a victory for both companies.
Innovation in search
"Through this agreement with Yahoo, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company,” said Microsoft boss Steve Ballmer.
New Yahoo chief executive Carol Bartz added: "This agreement comes with boatloads of value for Yahoo, our users, and the industry. And I believe it establishes the foundation for a new era of internet innovation and development."
Yahoo said the agreement would boost annual operating income by $500m (£305m) and save the company $200m (£122m) in operating costs.
The search deal will provide both firms with a better foothold in their fight against Google, giving them a combined US search market share of around 30 per cent, compared to Google’s 65 per cent.
Read more about the history of the
Microsoft Yahoo search deal on theEword blog.
