Microsoft, Yahoo Ink Search, Advertising Deal

The rumours and back-and-forths have been going on for as long as I can remember, but today, the deal was finally announced: Microsoft and Yahoo! have tied the knot – but only strictly related to internet search and advertising. The move is supposed to help both Yahoo! and Microsoft in their competition with Google.

The deal covers a whole boatload of things, but the most important one is that Bing will become the exclusive algorithmic search and paid search platform for Yahoo! web sites. In addition, Yahoo! will be the “exclusive worldwide relationship sales force” for the companies’ premium search advertisers. Microsoft’s AdCenter will take care of self-serve advertising.

Also of note is that Microsoft will gain an exclusive 10 year license to all of Yahoo!’s search technologies, and they will be allowed to integrate said technologies into Microsoft search platforms. The deal will last for 10 years, and has been in the works for over 2 years.

Yahoo is clearly happy with the deal. “This agreement comes with boatloads of value for Yahoo!, our users, and the industry. And I believe it establishes the foundation for a new era of Internet innovation and development,” said Yahoo! CEO Carol Bartz, “Users will continue to experience search as a vital part of their Yahoo! experiences and will enjoy increased innovation thanks to the scale and resources this deal provides. Advertisers will also benefit from scale and enjoy greater ease of use and efficiencies working with a single platform and sales team for premium advertisers.”

Microsoft CEO Steve Ballmer touts the innovation horn. “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.”


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