Done Deal: Microsoft-Yahoo Search Deal Officially Announced (Updated)


 

microsoft yahoo

After numerous attempts to make it work, it seems like a deal will finally be announced between Microsoft and Yahoo. Kara Swisher from All Things Digital gives a couple of details about the deal:

  • No upfront payment for Yahoo;
  • Microsoft’s search technology will power Yahoo’s search;
  • It’s unclear whether the Bing brand will land at Yahoo;
  • Yahoo will still sell search ads on its site and Bing, but Microsoft’s AdCenter will be the technology powering those sales.
  • The word is the deal will give Microsoft 30% market share in the search market.

    It looks like everything might have worked out in the end. Will this give Microsoft what it needs to compete with Google? Is Google running scared? We’ll see what everyone says when the deal is announced

    Updated:

    Looks like the deal has finally been announced. Check out the links for more details.

  • The deal is for 10 years.
  • Microsoft will license Yahoo’s core search technologies for 10 years;
  • Bing is the “exclusive algorithmic search and paid search platform for Yahoo sites’.
  • Yahoo is the worldwide sales force for both companies. Self-serve and search advertising will be built on Microsoft’s AdCenter platform.
  • Yahoo will own the user experience on its properties.
  • Microsoft will pay traffic acquisition costs to Yahoo at a rate of 88 percent of search revenue on Yahoo sites for the first five years. Yahoo will continue its search affiliate partnerships. On a conference call, Ballmer said: ”We paid a high TAC rate. There’s no question. He added that the upside comes as Microsoft improves relevance due to more scale. “Our upside comes as execution really builds,” he said.
  • “Some Yahoo engineers may move to Microsoft,” said Ballmer.
  • Microsoft guarantees Yahoo’s owned and operated revenue per search in each country for 18 months;
  • After 5 years, Microsoft can retake premium ad sales back from Yahoo.
  • The implementation will occur within 2 years after regulatory approval.
  • Microsoft-Yahoo Timeline:

    January 2008: Microsoft offers to buy Yahoo for $44.6bn in cash and shares, later raised to $47.5bn
    May 2008: Microsoft walks away from the table after the two sides fail to agree on a price
    June 2008: Yahoo strikes a deal to use Google’s technology, with Google ads appearing on some Yahoo search results
    November 2008: Google abandons the Yahoo deal after objections from anti-trust regulators in the US
    November 2008: Yahoo co-founder Jerry Yang stands down as the firm’s boss
    April 2009: Yahoo says it will cut 5% of its workforce after quarterly profits drop sharply
    May 2009: Microsoft relaunches its own search engine, now branded bing.com
    July 2009: After new speculation, Microsoft and Yahoo finally announce a web search deal

    [ZDNET] [CNN] [BBC]

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