After failing to buy Yahoo outright for $44.6B, this new deal is a ‘revenue-sharing agreement’ where Yahoo gets to still be Yahoo (just with a lifeless Bing-powered soul). The deal was inked way back in July, but they have had to wait for approval from the regulators before going forward.
Under the terms of 10-year Microsoft-Yahoo agreement, Microsoft's Bing search engine will power the Yahoo website, while Yahoo will in turn provide the main advertising sales team for Bing.
In exchange, Microsoft will retain 12% of the search engine revenues generated via Yahoo's website for the first five years of the deal, while paying the remaining 88% to Yahoo.
I am disappoint. In the 90’s and early 00’s Yahoo used to be great, I didn’t switch to Google until approximately 2002/3. Yahoo have been through rough times in the last few years, fighting a losing battle against Google, but I am dissapointed more in Microsoft who seem to believe that the solution to their technical problems (their search results suck—compare) is to just keep buying themselves marketshare. This wouldn’t have happened with Bill Gates around (“Buy him out, boys”).
In my opinion, this will not help Microsoft compete with Google one iota. It will just make the second best search engine suck as bad as Bing and that will only help Yahoo users move away. I can only hope some of the technical expertise at Yahoo flows the other way and teaches Microsoft a thing or two about how to search.