[moved from "Microsoft, Yahoo said to be near Internet-Search deal" (which was nearly the same time this thread)]
http://www.bloomberg.com/apps/news?pid=20601103&sid=a.Bxzxb2eRQU
"Microsoft Corp. and Yahoo! Inc. are getting closer to forging a partnership to collaborate on Internet-search technology and advertising, a person familiar with the matter said.
An agreement may be announced as soon as tomorrow if it’s not delayed, said the person, who declined to be identified because the talks are private. A deal, which would involve the companies sharing revenue from Web-search ads, hasn’t been signed and the terms aren’t final, the person said.
...." |
Microsoft press release:
http://www.microsoft.com/Presspass/press/2009/jul09/07-29release.mspx?rss_fdn=Press%20Releases
<<Yahoo! and Microsoft announced an agreement 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.>> |
Ah Juha-Matti, you where just a little faster :-).
Some highlights:
The term of the agreement is 10 years;
Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;
Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.
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.
Each company will maintain its own separate display advertising business and sales force.
Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.
Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites.
Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!’s O&O sites during the first 5 years of the agreement.
Yahoo! will continue to syndicate its existing search affiliate partnerships.
Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.
At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.
The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today. |
<< Providing a viable alternative to advertisers, this deal will combine Yahoo! and Microsoft search marketplaces so that advertisers no longer have to rely on one company that dominates more than 70 percent of all search. With the addition of Yahoo!’s search volume, Microsoft will achieve the size and scale required to unleash competition and innovation in the market, for consumers as well as advertisers. >> |
[Video] Microsoft CEO Steve Ballmer discusses the search agreement with Yahoo! and what it will mean to customers, advertisers and the industry:
mms://msstudios.wmod.llnwd.net/a2294/o21/presspass/1001582_SteveB_Announcement_Website_Bite_MBR.wmv
<< Microsoft Chief Executive Officer Steve Ballmer said the agreement will provide Microsoft’s search engine, Bing, the scale necessary to more effectively compete, attracting more users and advertisers, which in turn will lead to more relevant ads and search results.
“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 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.” >> |
Videos Steve Ballmer and Carol Bratz.
Ballmer: http://vimeo.com/5821967
Bartz: http://vimeo.com/5822061 |
Does that mean all the research Yahoo put into their own search engine algos (which were impressive, if perhaps not as good as Google)... was wasted? |
Yahoo's work is not wasted, because Microsoft gets the rights to put Yahoo's technology into Bing, then Yahoo uses Bing.
Microsoft is paying Yahoo 88% of ad income for Yahoo's search traffic. That's a mighty high percentage so I think Yahoo would be crazy not to accept. |
Gartner's blog entitled 'Microsoft, Yahoo! Ink Search Deal':
http://blogs.gartner.com/andrew_frank/2009/07/29/microsoft-yahoo-ink-search-deal/ |
Marissa Mayer: Microsoft-Yahoo deal may hurt competition:
http://www.pcworld.com/article/169306/microsoftyahoo_deal_may_hurt_competition_google_exec_says.html
"The head of Google's search organization said the search deal announced Wednesday between Microsoft and Yahoo looked likely to be negative for competition and for consumers.
If Yahoo adopts Microsoft's Bing search engine in place of its own, that will reduce the search market from three major players to two, said Marissa Mayer, Google's vice president of search and user experience.
...." |
[Humor] Nice video, reaction Steve Ballmer on the deal.
http://www.youtube.com/watch?v=qJbxJD8mN6A |
