Microsoft and Yahoo Strike A Deal To Take 50 % of The Search Engine Market ?

Because I am working on a project with a short deadline and there is a lot to do, in the next seven days there will be scarce posting on our blog. Starting next Thursday blogging will resume as normal with one post per day.

After two of the most popular technology companies Microsoft and Yahoo decided to
strike a deal yesterday, is there anything else that I can post about? Here are briefly the major points:

* As expected, Microsoft will power Yahoo Search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ advertisers.

* Microsoft will acquire an exclusive 10 year license to Yahoo’s core search technologies.

* Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.

* Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process.

* Microsoft will pay traffic acquisition costs to Yahoo at an initial rate of 88% of search revenue generated on Yahoo’s owned and operated sites during the first 5 years of the agreement, and guarantee revenue per search in each country for the first 18 months.

* Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.

It is obvious that Microsoft's CEO Steve Ballmer'a ambition to make Bing the second most popular search engine is very much alive and happening. The other side of the story is money. A search engine half as popular and powerful as Google is worth billions of advertising dollars.

Today Microsoft and Yahoo have a combined share of approximately 26% of the search engine market versus 68% for Google. Are they going to get market share from Google, or their share will slowly go down from what it is today? Only time can tell. My bets are on Google, because they proved so far to be a tough opponent to Microsoft.

Via TechCrunch:
http://www.techcrunch.com/2009/07/29/microsoft-yahoo-search-deal-the-most-important-facts-and-some-opinion/

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One Response to Microsoft and Yahoo Strike A Deal To Take 50 % of The Search Engine Market ?

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