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Microsoft, Yahoo Enter 10-year Search Deal

By - Source: Tom's Hardware US | B 21 comments
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Yahoo bada bing! Microsoft and Yahoo! hold hands in hopes of toppling Google.

Talks between Yahoo! and Microsoft have lasted for years, and today we finally get to see the two companies enter into a special partnership.

Microsoft will power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. With Microsoft managing search, Yahoo! will focus on the other parts of its business such as its portal and other web products.

The combination of both companies still isn't as big as Google, which dominates more than 70 percent of all search, but now Yahoo! and Microsoft feel that together they have a fighting chance in the market.

"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 CEO Steve Ballmer. "Success in search requires both innovation and scale.  With our new Bing search platform, we’ve created breakthrough innovation and features.  This agreement with Yahoo! will provide the scale we need to deliver even more rapid advances in relevancy and usefulness.  Microsoft and Yahoo! know there’s so much more that search could be.  This agreement gives us the scale and resources to create the future of search."

Microsoft will gain access to Yahoo!'s search technologies and code and will be free to integrate it into Bing if it so wishes. In return, Microsoft will pay traffic acquisition costs to Yahoo! at an initial rate of 88 percent of search revenue generated on Yahoo!’s sites during the first 5 years of the agreement.

The deal between the Yahoo! and Microsoft only cover search and advertising, as the companies' web properties and products, email, instant messaging, and display advertising will remain separate.

“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,” said Yahoo! CEO Carol Bartz. “Users will continue to experience search as a vital part of their Yahoo! experiences and will enjoy increased innovation thanks to the scale and resources this deal provides. Advertisers will also benefit from scale and enjoy greater ease of use and efficiencies working with a single platform and sales team for premium advertisers. Finally, this deal will help us increase our investments in priority areas in winning audience properties, display advertising capabilities and mobile experiences.”

What do you think of this deal? Will the joint forces of these two giants be able to take on the even larger giant from Mountain View?

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  • -5 Hide
    mtyermom , July 29, 2009 2:25 PM
    So Google and Yahoo want to make a deal and the FTC goes all batshit crazy... now Microsoft and Yahoo strike a deal and not a peep... ???
  • 9 Hide
    Anonymous , July 29, 2009 2:29 PM
    MS should just stick with continuing to improve their OS.
  • -1 Hide
    adamovera , July 29, 2009 2:30 PM
    "The deal between the Yahoo! and Microsoft only cover search and advertising, as the companies' web properties and products, email, instant messaging, and display advertising will remain separate."

    Thank God! MS won't be able to fuck up my yahoo email that I've had for over a dozen years. Whew, relieved! (GMail just isn't the same)
  • Display all 21 comments.
  • 4 Hide
    valcron , July 29, 2009 2:32 PM
    Now I have not tried bing but honestly I don't see myself switching from Google.

    Until the day Google stops returning the results I need when I run a search I see no reason to. Add all of the bells and whistles you want but its the results and ease of use that matters to me.

  • 5 Hide
    aft_lizard01 , July 29, 2009 3:05 PM
    mtyermomSo Google and Yahoo want to make a deal and the FTC goes all batshit crazy... now Microsoft and Yahoo strike a deal and not a peep... ???

    Well one would have created a company that had 90% of the ad services on the internet, the other only33% or so.

    You need to separate arms of a company and not sit there and think because a company like MS controls 90 of software that it would create a anti-trust issue by gaining market share against google which controls 66% of all searches.
  • 2 Hide
    mtyermom , July 29, 2009 3:40 PM
    aft_lizard01Well one would have created a company that had 90% of the ad services on the internet, the other only33% or so. You need to separate arms of a company and not sit there and think because a company like MS controls 90 of software that it would create a anti-trust issue by gaining market share against google which controls 66% of all searches.


    Excellent rebuttal, thank you.
  • 1 Hide
    tntom , July 29, 2009 5:02 PM
    I think Yahoo really got a good deal here. I've found Bing to give better results than Yahoo search. An if they are going to rely on Bing for 10 years it absolutely makes since that they would hand over their technology to Bing so they can fully benefit from the deal. I like this arrangement much better than Microsoft buying or merging Yahoo.
  • 0 Hide
    freak77power , July 29, 2009 5:26 PM
    Yahoo and Gmail suck especially GMail.
  • 0 Hide
    gekko668 , July 29, 2009 5:33 PM
    While i'm not going to give up google but the partnership between yahoo and microsoft are going to benefit the consumers. I'm all for it and plus I got Firefox and several add-on to removed all of the pesky ads.
  • 0 Hide
    jacobdrj , July 29, 2009 5:55 PM
    Whether people want to admit it or not, Microsoft is playing the 'AMD' role with regards to Google right now. They are keeping Google honest, and forcing them to innovate. This puts Microsoft in a de facto position of influence in the search world at 33-'ish'%. Unlike Yahoo!, M$ seems determined to make inroads into this market, where Yahoo! seems to have been standing almost still since renovating Yahoo! mail.
  • 0 Hide
    jcknouse , July 29, 2009 6:42 PM
    freak77powerYahoo and Gmail suck especially GMail.


    And Windows Live Mail is great? It's slower than running snot in the Antarctic in the dead of winter.

    I like the *old* Yahoo mail interface. It was decent, did the job, and was fast.

    None are super, but Windows Live Mail is a joke.

    BTW, I gotta find out if Google has a travel thing like Yahoo. Time to snip the purse strings to Yahoo Travel now that they've teamed up with he who is HailStorm ( aka - looney tunes Ballmer)
  • 5 Hide
    fliponthetele , July 29, 2009 6:53 PM
    "...real consumer choice in a market currently dominated by a single company," said Microsoft CEO Steve Ballmer.

    Oh, the irony.
  • 0 Hide
    ethanolson , July 29, 2009 7:05 PM
    I'm calling it bing-hoo now.
  • 2 Hide
    Flameout , July 30, 2009 4:36 AM
    fliponthetele"...real consumer choice in a market currently dominated by a single company," said Microsoft CEO Steve Ballmer.Oh, the irony.

    lol +1
  • 0 Hide
    r0x0r , July 30, 2009 5:04 AM
    tntomI think Yahoo really got a good deal here. I've found Bing to give better results than Yahoo search. An if they are going to rely on Bing for 10 years it absolutely makes since that they would hand over their technology to Bing so they can fully benefit from the deal. I like this arrangement much better than Microsoft buying or merging Yahoo.


    I agree. I actually stopped using Google and use Bing now (everyone turns and looks at me weird)... :)  I just don't like Google's privacy policies as well.

    I find that Bing's web searches are about as good as Google but for picture searches, Bing is far superior.

    And Yahoo Mail is rock solid, even after the 10 years I've been using it.
  • 0 Hide
    ptroen , July 30, 2009 5:04 AM
    I think the search war has just begun but google is clearly dominating at this point. Still with GPU accelerated search clusters you could see more intelligent search engines on the server side emerging. Remember good search index is more about analyzing the data then actually retrieving the data.
  • 0 Hide
    climber , July 30, 2009 11:01 AM
    I think the commercial (TV ad) for this new merger should be Bollywood's current new trendy music from Slum Dog Millionaire, "Ji Ho", call it "Bing Hoo", with the same instrumental but modified lyrics.
  • 0 Hide
    coolkev99 , July 30, 2009 12:55 PM
    I have Gmail and while it works, it makes no sense. Yahoo mail is far superior and works like you expect it.
  • 0 Hide
    coolkev99 , July 30, 2009 12:58 PM
    Oh, and I"m starting to like Bing more than any other search engine. Never thought I'd say that, I used to hate Live search.
  • 0 Hide
    xenorage , July 30, 2009 7:49 PM
    Want to talk about the irony, next year you are going to have people running Google Chrome OS logging into Yahoo to use Microsoft's web search.

    Tell someone that five years ago and they would have said you are insane and that you needed to be rushed to the local loony bin!
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