July 29th, 2009
Poll: Did Microsoft and Yahoo do the right thing?
It’s been close to 18 months since Microsoft and Yahoo began their on-again/off-again mating dance. On July 29, the two finally agreed to a plan, whereby Bing becomes the search engine behind Yahoo and Yahoo becomes the ad force for both companies’ online advertisers.
Microsoft and Yahoo issued a joint press release outlining the details of their agreement. My blogging colleague Larry Dignan outlined some of the most interesting points, including:
* The proposed deal is for 10 years
* The deal is subject to regulatory scrutiny, with the pair expecting it to close (bar any problems) in early 2010
* Microsoft has a 10-year exclusive license to Yahoo’s core search technology and has the right to integrate it into Microsoft’s Web search platform
* Yahoo Panama online ad customers will be transitioned over to Microsoft adCenter in the coming 12 to 24 months as Panama is phased out
* Microsoft will pay Yahoo through a revenue-sharing agreement based on traffic generated on yahoo’s network of both Yahoo-owned-and-operated, as well as affiliate sites
* Some Yahoo employees will be taking jobs at Microsoft to help integrate search and some Yahoo jobs will likely be eliminated as part of the transition
There are more than a few provisions that may prove thorny to implement. For example:
* Bing becomes the exclusive algorithmic and paid search platform for Yahoo sites, but Yahoo will continue to use its own technology and data in other areas like display advertising
* Yahoo’s sites will still be branded predominantly as “Yahoo” but carry the “powered by Bing” message at the bottom of Web pages
* Self-serve advertising for both Yahoo and Microsoft will be handled via Microsoft’s adCenter online-ad platform
* Yahoo is the sales force for both companies’ premium search advertisers, but each company plans to maintain its own separate display ad business and salesforce
There have been lots of twists and turns in the Microsoft-Yahoo saga. Do you think the new deal — at least what we know about it so far — sounds like the best path for Microsoft to have taken to grow its share in the search/online ad business?
Loading ...What do you think will happen next in the never-ending Microsoft-Yahoo saga?
Will regulators (possibly spurred by Microsoft and Yahoo competitors) try to derail the deal? Will the agreement prove too technically or managerially complex for the pair to manage? Or do you see the No. 2 and No. 3 players in search being willing to set aside differences to take on Google?
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