Microsoft and Yahoo! have announced a deal that changes the search landscape considerably.
Microsoft and Yahoo! have announced a deal that changes the search landscape considerably. In a press release from Microsoft, the Redmond company has said that it has reached an agreement with Yahoo!
"…that will improve the Web search experience for users and advertisers, and deliver sustained innovation to the industry. In simple terms, Microsoft will now power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers."
So the long ‘will they/won’t they’ story comes to an end. It started back in February 2008, when Microsoft made a proposal for the acquisition of Yahoo! and has been in and out of the search industry news since then.
How close would this move "Yahbing!" to Google? Not that close. The Wall Street Journal in an earlier post, mentioned that comScore places a combined Yahoo! and Microsoft search at less than half of Google’s 65% share of the U.S. market. But the point here is that this will be an awful lot closer than Bing and Yahoo!’s current individual shares.
A new website "Choice. Value. Innovation" has been constructed to cover the deal. It lists the key terms of the agreement which includes the following clauses.
- The term of the agreement is 10 years
- The agreement gives Microsoft a 10 year licence to Yahoo!’s core search technologies enabling Microsoft to integrate Yahoo! search technologies into existing web search platforms.
- Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites while Yahoo! will continue to use its own technology and data in other areas of its business such as display advertising technology.
- Yahoo! will become the exclusive worldwide relationship sales force for both companies ’ premium search advertisers.
- Full implementation is expected to occur within 24 months following regulatory approval.
Importantly for both companies the agreement doesn’t cover other web properties and products such as email, instant messaging, display advertising or any other aspect of the companies’ businesses.
Will it beat Google? Difficult to say. In my opinion the biggest hurdle for anyone taking on Google is basically changing a "habit" that millions of people have got into. I don’t think many people who use Google use it because they think it is a better search engine per se (and I always think that here relevancy is in the eye of the beholder) but think that they do so because they are "used to" using Google. That is, I’ll admit, a sweeping statement.
What I hope it will do is to benefit the search user. The deal could at last give Google some serious competition and that has to be good for everyone.
See our follow-up post: Are we losing two of the top four search engines?
Tags: acquisitions, antitrust, Microsoft, yahoo!