Now that the search deal struck between Microsoft and Yahoo has been officially confirmed by both companies, by means of a press release and a website dubbed ChoiceValueInnovation.com, let’s take a step back and analyze the most important tidbits from the announcement:
As expected, Microsoft will power Yahoo Search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ advertisers.
This will have major repercussions for the online advertising industry, where both Microsoft and Yahoo carry a lot of weight. Likely, it will take months if not years to align these important businesses. On the flip side, as Yahoo CEO Carol Bartz indicated in the press release, advertisers and publishers would benefit significantly from a unified platform and the promise of scalability all around. I believe this is indeed the core advantage of the deal in terms of being able to compete with the dominant rival to both companies, Google.
Of course the companies didn’t spell out Google in the official announcements made this morning (except for a link on the Yahoo blog post), but which other company “dominates more than 70 percent of all search”? We actually thought it was more like 65%, but the reality is that this difference in statistics isn’t nearly as important as the obvious fact that Google controls the large majority of search market share on one hand and even more of the advertising dollars that flow through search, on the other hand. Clearly, Microsoft desperately wants a piece of this cake, and it won’t settle for a small one.
Microsoft has shown it can compete in search by releasing Bing, which already has claimed its stake as a quality search engine that people actually use and enjoy using to boot. It helps that it has boatloads of cash ready to market Bing aggressively, and you can make sure that they will, too. Furthermore, the companies claim the search deal and technology exchange can lead to more innovation in search, which I agree with wholeheartedly and encourage on multiple levels. If it effectively will eat away at Google’s core business by stealing significant market share organically remains to be seen, though.
One of the most apparent facts in the announcement that was not known beforehand by any blogs or news sites, is the longevity of the agreement: 10 years, which is like an eternity in the Internet space. Microsoft will acquire an exclusive 10 year license to Yahoo’s core search technologies, which is basically the same as saying it just gained unparalleled access to the blueprint of Yahoo Search, something that can only lead to improvement of its Bing search engine. That and the fact that Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites confirms the notion that Sunnyvale has indeed given up on search in a big way.
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. That means there’s now Google AdWords vs. Microsoft AdCenter and Google AdSense vs. Microsoft PubCenter, and little else that matters in the search marketing arena. Take note, marketers.
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 following initial implementation in that country. This is huge, and it shows Redmond will continue to chase after the heart of Google, no matter how much money it takes. After those 18 month and 5 year periods, it’s unclear what will happen. Important to note is that Yahoo! will continue to syndicate its existing search affiliate partnerships.
Yahoo expects to fully implement the combined effort within 24 months following regulatory approval, which it hopes to gain in early 2010. The company estimates – based on current levels of revenue and operating expenses – that the 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, something it sorely needs and which shareholders will be very happy about if it checks out eventually.
Already, Yahoo and Microsoft are fencing off regulatory investigation and criticism, stating clearly that they will be limiting the data shared between the companies to the “minimum necessary to operate and improve the combined search platform”, and restrict the use of search data shared between the companies.
What do you think: is this a win-win agreement for both Microsoft and Yahoo? How about users? Should Google be worried? Will the deal be approved at all?
Carol has actually linked to Google here – http://ycorpblo...l-means-to-you/
So you will have 2 skins for bing search. One is native, and another is yahoo’s.
Just to put on record. One copy(cache) of internet is less, yahoo’s. One crawler less. One keyword match processing server farm is less. Greener world!
I think this lady Carol, has her eye set of focusing Y! on some specific products where they hold the lead.. e.g Y! Finance.
I hope it pays off… This is much better than MS buying Y!
Stupid yahoo, all they need to do is re-brand their search engine. I guess they needed the cash badly.
Yes, I also do think that cash was the main thing due to which they approved this deal. Let’s see Can this deal bring the King of Search engine’s – “Google” down.
I don’t think so..
http://www.smartbloggerz.com
Interestingly, Yahoo does own a very good search brand: Altavista.com (or simply av.com). It still rings a bell among many of the web users. But Yahoo has been neglecting it for years (just visit the website) and due to some ill placed pride never wanted to use it instead of ‘Yahoo search’.
Exactly! Web users don’t identify search with the name Yahoo, but they do with the name google. I actually think Yahoo search is better than MSN search. I’m not sure about Bing yet.
Google makes a great product, but they are the toyota of search where that is their main focus on one great car and have years to develop it. Altavista is okay, kinda long to spell and say. Heck, just partner with yellowpages.com if you want to exploit local search.
So does this mean the search engine that will be hosted on yahoo.com and bing.com will essentially use the same algo? Seems a bit odd if that’s what’s going to happen i.e. no discernable difference between whether you search on yahoo.com (powered by bing’s algo) and bing.com (powered by bing’s algo).
That is what I would like to see.
Yes, that is the way Yahoo was for years. The results were the same as you could see on Google and there was a little logo that said “Powered by Google”.
Now, there will be a little logo at the bottom of the search results that says “Powered by Bing”.
I wrote in my blog that this is good news for advertisers, but it may not be good news for users.
Eh….I don’t think Yahoo! results have ever been “powered by Google”
Maybe because you weren’t alive in 2000. Moron.
Of course they were, in the early days of Google when Yahoo tried to buy them. Then Google became a real competitor and they stopped.
See this official letter by Google on June 26, *2000*: http://www.goog...lert2_2000.html
OK a long time ago. Sorry for being a moron and not knowing that.
What, are you 7 years old?
That sir…IS THE “EVILIEST MAN” ever in the History of the “ENTIRE WORLD”!!!
NONE other than, “bill gates” who comes on blogs all over with his SINISTER wife to lie, lie, lie (as he had Ballmer do TODAY to SCREW Yahoo)…under all kinds of names to attempt to “sales pitch” you!!!
Hey, don’t be insulting the guy, stupidity is different from just not knowing how things used to work. Just tell him how they were, and he’ll adapt to it.
This is sooo…SAD!!!!!!! I work for God and to SEE “the search engine part” of Yahoo!, fall into “evil hands” TODAY…REALLY MAKES ME WANT TO CRY!!!!!!! This is “THE END” of Yahoo! as WE ever WILL know it…PERMANENTLY!!!
I used to LOVE it, NOW like EVERYONE Else is, I’m Switching to “GOOGLE!”, PERMANENTLY!!!
Also, “BING” is an evil Hornet’s “STING”!!! DON’T TRUST it, it belongs to the Evil, Notorious, Monopoly Playing, “SLICK as ICE Wilie” Gates!!! DON’T ever use Micro$oft’s Yahoo EVER-AGAIN, either, its a “STINGER”!!!
This agreement would definitely provide a much needed momentum to Bing in terms of traffic as large scale traffic is mandatory in order to learn what people search for. Its tough to say for now that whether this move would eat away Google’s market share but without doubt this will be good for consumers as competition is always healthy
ur “VERY evil”, Krishna…aka “bill gates” babbling up there!!!
obvious troll is obvious.
I don’t think that it will affect google’s share of traffic much because google has a broader approach towards buying large websites. I know google possesses greater number of websites in various topics & even large sites like digg & twitter are partnered with google in some way or other. So eventually google will own the internet, following which bingoo(bing+yahoo!) may be the runner-up…
It will take more than just a better search algo… Y! and Microsoft will have to pull off a brilliant marketing strategy to wrestle us away from Google. Google search has become too engrained.
Good reporting. I think in the end this is good for MS. They are doing the search and their ad platform Adcenter is making the money. Yahoo is basically doing nothing while MS handles all the technology, but Yahoo didn’t have any choice other than sell. They were forced by their investors to sell or do something dramatic. Yahoo I think lost the search on this one.
editoral criticism: the most important fact is the length. you noted it, but several paragraphs in.
/just sayin
serves me right to make a critical point and have it get all screwed up, in the wrong thread without words that make it make sense. my karmic retribution.
what i meant to say (as a standalone comment) was that the length of the deal (10 years) is the most interesting fact in the story and should have been highlighted earlier on. not to nit pick.
I definitely want to know how does it impact our search engine rankings.
Yahoo gives up. Its death continues.
Yahoo died when the “good people on yahoo’s staff” were taken out by “bill gates” by FORCE; MONTHS AGO!!!!! bill ur on ur death bed soon!!!!! jaja! lmfao
It died MONTHS AGO, when “bill hates”, FORCEFULLY REPLACED the previous yahoo staff who were all GOOD! NOW the ceo and staff are all EVIL as Sin and that’s the ONLY REASON bill gates got it!!! he also got it from his father satan in the asss a lot for making this “Evil-Deal” work…while satan switched with bill and then bill gave his 1 incher or REALLY tried to his Father, satan!!! bill is satan’s son, its the TRUTH, Believe me!!!!
once again, obvious troll is obvious.
Its actually Google AdWords vs MS AdCenter!
Yup and Google Adsense vs Microsoft PubCenter(still in beta)
What I hear, Yahoo Panama is lot more stable than Adcenter though.
If you can’t gain market share with quality services just buy out everyone and then homogenize. Sounds like web browsers circa 1996….
Yeah, because bing is not innovative at all. Also, we really want a single company like Google to dominate an industry, so any serious competition should be criticised – just like 1996.
Have you ever used Bing?
NO! NEVER WILL like yahoo NOW, its a “STING”!!! I heard Ballmer gave it to “slick-willie” gates up the asss, TODAY, After “the deal” was CLOSED!!! gates gave his usual SMILE of “ENVY” when it was done!!! LMFAO
NO! NEVER WILL like yahoo NOW, its a “STING”!!! I heard Ballmer gave it to “slick-willie” gates up the ashole, TODAY, After “the deal” was CLOSED!!! gates gave his usual SMILE of “ENVY” when it was done!!! LMFAO
NO! NEVER WILL like yahoo NOW, its a “STING”!!! I heard Ballmer gave it to “slick-willie” gates up the azzhole, TODAY, After “the deal” was CLOSED!!!
gates gave his usual SMILE of “ENVY” when it was done!!! LMFAO
NO! NEVER WILL like yahoo NOW, its a “STING”!!! I heard Ballmer gave it to “slick-willie” gates up the azs hole, TODAY, After “the deal” was CLOSED!!!
gates gave his usual “self-satisfied” billionaire SMILE of “ENVY” when it was done!!! LMFAO
NO! NEVER WILL like yahoo NOW, its a “STING”!!! I heard Ballmer gave it to “slick-willie” gates up the asz, TODAY, After “the deal” was CLOSED!!!
gates gave his usual “self-centered”, billionaire SMILE of “ENVY” when it was done!!! LMFAO
NO! NEVER WILL like yahoo NOW, its a “STING”!!! I heard Ballmer gave it to “slick-willie” gates up the backdoor, TODAY, After “the deal” was CLOSED!!!
gates gave his usual “self-centered”, billionaire SMILE of “ENVY” when it was done!!! LMFAO
can someone put a banhammer on this Goodman guy?
Go take a basic business strategy course. Consolidation is often the best way to compete.
I would be curious to know how will it effect our website rankings since now Bing and Yahoo – both will show same results ?
It seems obvious that the rating will be defined by Bing. Whatever rating you manage to get on Bing will be there on Yahoo.
I would be curious to know how will it effect our website rankings since now Bing and Yahoo – both will show same results ?
yahoo it seems never wants to get into the core search technology the best it will do is enhance the experience around the bing result. The search result/attributes is such a huge part of the experience I am not sure how much power yahoo would have to demand microsoft to innovate around its vision of improving the search experience.
It seems Yahoo bought a lifeline for 10 years in which it can morph into an even attractive destination but one that doesn’t need searching the web to be a big part of it.
Hopefully the 200million capital expenditure doesn’t lead translate into layoffs and they have a plan to put it to good use.
This Deal makes a lot of sense. Microsoft concentrates on the platform, Yahoo on putting things nicely together on the front end and selling this package at a premium to marketing people. Looks more like intelligent design than Google’s blind evolution.
Of course, “the deal” looks good to you a$$hole, bill gates!!!
GOOGLE FAN “FOREVER”, NOW!!! Your a ‘CONDEMNED SOUL’, bill hates!!!!!!
This is sooo…SAD!!!!!!! I work for God and to SEE “the search engine part” of Yahoo!, fall into “evil hands” TODAY…REALLY MAKES ME WANT TO CRY!!!!!!! This is “THE END” of Yahoo! as WE ever WILL know it…PERMANENTLY!!!
I used to LOVE it, NOW like EVERYONE Else is, I’m Switching to “GOOGLE!”, PERMANENTLY!!!
Also, “BING” is an evil Hornet’s “STING”!!! DON’T TRUST it, it belongs to the Evil, Notorious, Monopoly Playing, “SLICK as ICE Wilie” Gates!!! DON’T ever use Micro$oft’s Yahoo EVER-AGAIN, either, its a “STINGER”!!
This should be interesting… Bing is actually pretty useful and their new search “game” where they have user playing to help them refine search results is akin to having human edited search…brilliant.
STFU!!!! Windows Employee
banhammer the guy, please…
The real action in search today is real-time search. While Microsoft fights to get a piece of the conventional search, the new trend is real-time search, which will supplant conventional search eventually. And the real players here would be, not the search engines, but guess what, URL shortener companies.
Read my blogpost:
http://bit.ly/y8cJC
So, the question is, can this deal prevent Yahoo from moving into the real-time search space?
Wherever you got your education from, you should consider asking for a refund.
“the new trend is real-time search, which will supplant conventional search eventually”
So, if am looking for information on the american civil war, how will this “real-time search” of yours solve the problem?
Real-time search has its place but its not going to replace conventional search.
When I said “supplant”, I meant in search volumes.
With real-time search on “american civil war”, you will get the current discussions in forums, just published articles, podcasts, recommended links from your network on facebook, twitter etc. You will get links that are not yet picked and indexed by any search engine. Of course, if there is no info, you would fall back on conventional search.
People crave for latest information on any topic. A good analogy is between breaking news, current news, and old news. Which do people crave the most? Same thing in search: real-time results, recent results, and old results. Search engines today try to prioritize recent results over old results, but there is no easy way to get real-time results. That’s why Twitter and Facebook are quite popular, among other reasons, because your network publishes links to articles just off the press.
But your point is well taken. Conventional search (to find recent and old results) will remain. My point is that it will be a shrinking piece of the search pie in terms of search volumes.
In this context, the YHOO-MSFT deal is the fight for a bigger piece of the pie in conventional search. But the trend is towards real-time search. If the deal is aligned with the trend, it can be successful. Otherwise, it will be an expensive failure.
Follow the money, my friend. What queries bring in more? A real time search for “American Civil War” or any kind of search for “Digital camera”.
If it doesn’t make money, it may be an interesting service for users, but it doesn’t count in the Great Game between Google and Microsoft.
And I’m not saying that these companies are all about the money. I’m saying the money is the critical factor that allows them to undercut each others businesses (not to mention employee people on a sustainable basis).
Oh boy, another kool-aid drinker. Real-time search isn’t useful for commercial searches. TRUST is. And real-time and trust do not mix terribly well. You wonder why Twitter’s search doesn’t monetize? Because it’s full of spam garbage.
Nothing is more trustworthy than links recommended by your friends and networks.
On Twitter, the value you get depends on whose recommendations you follow, and there are pretty much credible people in all subject areas.
There are many ways Twitter can filter out spam, which I am sure they are doing. I wouldn’t write off Twitter search.
Well I mentioned Twitter Search. Advertisers want scale. You’re talking about word of mouth marketing from one individual to another. That’s something entirely different to search engine results of web pages.
No, not word of mouth.
Take this example, for instance. I have a question and I tweet it. Some of my followers and some non-followers respond. I decide which response was good and make that response as the “favorite”. Now Twitter can give credit for that person for making a “favorite” tweet, isn’t it? Cummulatively, the system can figure out the trustworthy sources from non-trustworthy ones.
Just as websites seek link references today to improve their ranking, the equivalent on Twitter could be the “favorite” rating. Tweets from high “favorite” rating get higher listing. (Do I see the SEO industry to start gaming this one now?)
For building a scalable trustworthy real-time search engine, trustworthy sources are key.
Since you mentioned word of mouth, I have been really intrigued. Why can’t word of mouth marketing campaigns be used a a base for figuring out trustworthy sources? I wonder if there is something inherently contradictory about it.
Consider this. There are 2 things in a word of mouth campaign – what is being propagated, and who is propagating it. If what is being propagated is valuable, then should the people propagating it get extra points in terms of trustworthiness?
Before Twitter, it was impossible to know the participants in the word of mouth campaigns. Now it is possible. Can this extra piece of information be used in any way to construct trustworthy sources?
This may not be the forum for in-depth discussion of real-time search. I am curious to learn more about what’s possible and not possible. Please do connect on Twitter if you wish to discuss further offline.
ur GOD DAMNED, bill gates, the fukhead, “The Cause” of ALL evil going on in the world TODAY! NOTE: I’m talking to the “babbling pencil” that can be snapped in two, VERY EASILY…e.g. ‘the evil commenter’ above me!!!
Any statements (on or off the record) as to what will happen to BOSS?
It will most likely be killed off
Yeah. It seems likely and it’s a pity.
that will be a disaster thats a truely innovative product
Good bye BOSS.. that’s what happen when MBA controls innovations.
Don’t be too sure. Keeping it or relaunching something similar would be a brilliant move on Microsoft’s part, because it’s a move Google can’t compete with.
Just as Microsoft can’t give away free open source operating systems, Google can’t give away free access to their search index. As the insurgent, Microsoft has nothing to lose by positioning itself as the more open competitor.
STFU, bill gates!!!!
(comment above mine!)
Wow! Time flies while you’re reading in real-time, and from one minute to the next, mergers are struck. Hmmm…that would explain a lot of the modifications on Yahoo!
Massive layoffs ahead at Yahoo? What’s everyone’s take on this?
Does anyone know what this deal means for the future of Yahoo Paid Inclusion? Will the new MS powered Yahoo Search still include PI listings or will Yahoo Search become truly organic?
This deal looks good for the Internet ecosystem including users.
MS gets the benefit of Yahoo salesforce for the Top advertisers.
MS can focus its marketing efforts on attracting the small to mid-size advertisers where Google has a huge lead.
Consolidating down to 2 platforms (AdWords and AdCenter) will help advertisers of all sizes.
Combined they have a chance to compete with Google on monetizing SERPs.
The Search wars will continue with most of the innovation coming in particular verticals. (Real-time, news, whatever blekko is doing, etc)
Display business still has 3 major competitors (Google, Yahoo, AOL) + Microsoft.
Yahoo can focus its efforts on serving consumers, content and community.
MS can focus on web services for businesses.
This looks like sort of an inflection point in the history of the Internet. We are entering a period where the largest players are now much more focused in their investments and operations. Start-up businesses, many of which presently don’t realize how disadvantaged they are in the current state, will soon have some real options in partnering with these mega companies.
Let’s hope for a short DOJ review so these business can start executing on the vision that is being laid out here.
Have you ever worked with yahoo’s sales force? This company is so over the hill, that I can definitely say I’ve had much better experiences going to the DMV.
Are Madison Avenue and the Fortune 500 bastions of cutting edge internet gurus? Because that’s where a relationship sales force is primarily targeted — over the hill = just the right speed.
Fast internet companies would be working through Microsoft’s internet tools.
STFU!!! Micro$haft Employee, go ’spank the monkey’, bull-shiiter!!!!!!!!!!!!!!
I’m talking to you, “john”!!! NO ONE cares about the bs your talking about!!!!! Go to HELL, NOT that u won’t 1 day!!!! LMFAO
I still don’t quite understand what will happen to the existing Yahoo search platform. Will it be abandoned? Will MS take it over? Will Yahoo continue using it for vertical search on its many properties? And what about search engineers/developers at Yahoo?
What will happen to BOSS?
It will be more or less abandoned, with the technology exclusively licensed to Microsoft. I would expect Microsoft to issue a whole lot of job offers and try to cherry pick the best features for inclusion in Bing.
You GREEDY, VERY DARK and SINISTER MAN!!! Its you again, bill hates!!!! I think you want to bing ballmer some more after scratching his asss!!! Dummy!!! you little rat, CAN NOT hide from God!!!!!!! haha!
it’s over for Yahoo!
it is myspace
bill gates, “the antichrist”, DESTROYED yahoo, today!!! Ballmer is his “butt-buddy” and “ass scratcher”… I heard gates got a BIG thrill getting it up the arse from ballmer when they closed the deal, TODAY!!! LMFAO
No wonder Yahoo (mail overview page) already pushing IE8 as default browser…..even on FireFox3.5. @http://bit.ly/rX5n9
this is a way for bing to become established as a brand in searchers’ minds. no large sums of extra money is spent in order to do this, just yahoo gets to keep most of the revenue generated by bing on yahoo sites for 5 years. more advertisers are attracted because of improved scale provided by bing on yahoo sites. this is a smart investment partnership by msft, which basically pays for itself without large capital expense. focus on the core business (software) is maintained by focusing on growing bing search technology, while yahoo focuses on selling ads, which i guess is what they do. yahoo has a somewhat diffuse mission in general, that is their problem (confusion between selling ads and selling services).
No wonder Yahoo (mail overview page) already pushing IE8 as default browser…..even on FireFox3.5. @ http://bit.ly/rX5n9
So, with this ten year agreement, does this insure that Yahoo! will be around for another ten years? Since the deal essentially makes Yahoo! a mirror of Bing and with both platforms using Bing’s algorithm, Yahoo might possibly fade away.
Oh wait, Bing doesn’t offer free fantasy sports.
We need to coin up a new word for this thing.
I propose: Microhoo.
what about:
Microsoft!
what about bingoo…
Hehe, good one.
Bingoo!
Let’s see how all these plays. It will be interesting to see how Google reacts to this news.
Dinosaurs mating.
@Rob
Dinosaurs mating led to the next big thing in evolution.
Really? What exactly do you think that dinosaurs evolved into?
birds
Mike Arrington can finally cash in on his primary shill check from Ballmer. He’s been working with Microsoft PR at undermining Yahoo for years.
Finally, the box of cuban cigars is cracked open.
I never knew “Boatloads of Money” means ZERO and “right technology” lies with MSFT.
WOW!!!!!! effect.
Looks like YAHOO decided to be a marketing company rather than a technology company.
I think you meant:
Looks like YAHOO admitted they are a marketing company rather than a technology company.
is this the first step in what could possibly the aquisition of yahoo by microsoft?
That would be a waste of cash for Microsoft. This is all that it wanted.
It might be worth it for MS to buy their traffic at some point, depending on the price.
the next steps, maybe:
in 5-10 years, people now accustomed to bing, and msft persuades people who use yahoo email, address book etc to convert to windows live/hotmail brand. yahoo will more clearly focus on selling ads.
also, msft offers premium services (cheap, not free, email etc) thereby growing revenue. this will be inaddition to, not at expense of, ad revenue, the pie just gets bigger and more variegated. the yahoo email customers who would like to pay, switch to the premium services. these are integrated with other msft services like office on line and others. yahoo even more clearly focusses on selling ads, dependent on ad revenue.
overall, msft uses search and ads to extend the market for its other services, not for the revenue as such.
Very interesting deal for Yahoo for the next 5 years. But then what? They will have left the search market so they won’t have any other choice that to keep going with a search big player.
Very clever strategy from Microsoft, they attack Google from various sides:
- Direct attack: Make Bing a similar product to Google search to compete directly
- Indirect attack: Sign search partnerships to include it in portals like Yahoo or social networks like Facebook
Coming soon: The empire strikes back! Looking forward to seeing that!
What happens of all the engineers in the search group at Yahoo!, they must be pretty pissed off, the whole platform will be abandoned?
BTW does Yahoo do anything else technical apart from search, else Yahoo will no longer be a tech company.
> What happens of all the engineers in the search group at Yahoo!
Accept jobs at Microsoft?
Do we know anything about mobile? Will Bing mobile be powering search for Yahoo mobile?
I wonder what this will mean for SEO
A big win for Msoft but not so great for those that like diversity in natural search. Bing will benefit from Y! talent and research but now there will only be two major engines for the forseeable future and they are like consumed with innovating paid not natural search…
Robin, any thoughts on what this means for Yahoo”s Panama/APT platform that was to be the ‘future of the company’?
Does this mean bye bye to YHOO (I mean Inktomi) search indexer?
The search and ad platforms are toast, Bartz specifically discussed the large capex savings from that. The engineers will be reassigned or laid off. Microsoft has the right to take advantage of Yahoo’s IP where possible, but this may be minimal, as Bing and AdCenter are (finally) pretty solid. Perhaps Microsoft can hire some of Yahoo’s people, I haven’t seen this directly addressed.
But… What a devastating indictment of Yahoo’s (mis)management under Semel and Yang. While most media focus on Yang’s $20 billion mistake rebuffing Microsoft’s merger attempt, the real tragedy was Hollywood Terry trying to manage a technology company like a “media company”, fatally damaging his engineering assets in the process. Including the Overture paid-search asset Yahoo bought for $1.6billion in 2003. Overture were the pioneers in this space yet Yahoo just sat back and watched Google pass them and ultimately destroy them.
Sadly, Fox Interactive Media made the same mistake – asking TV and cable guys to manage technology (and people) they didn’t understand. Thus the decline of MySpace, IGN, Scout.com, et al
This deal is win-win short-term, but marks the end of Yahoo as a strategic player. Bartz made the best of a bad situation.
I like your summary here. This is how I see it as well.
Yep – but if the truth be told, it all started back with Overture. O was the one that allowed G to take hold in the paid listing market by dropping the “search in a box” and not paying attention to the long tail of search – compounded by their tardy revamping of their ad center “Panama”, which was three years in the making and a flop when out…. O-exes sighed when they fobbed it off to Y! knowing their search platform was a big ball of wax slowly melting!! the rest is history…. and as mentioned earlier, it is also an indictment on Y! management overseeing this – many of whom left before the boat sank…. but clearly the ones with the hands at the helm!!!
What changed? Not a lot. Strategically the virtually merged Binghoo! needs to ‘Innovate or die trying’ http://tinyurl.com/mbb39t. My guess is it will do neither. AOL anyone?
We’re definitely witnessing dinosaurs mating. For Microsoft, it gives bing/ad center a ton more scale to justify their R&D investments. Nevertheless, actually giving Google a run for their money is a long shot in my mind. For users and advertisers, it’s good news at least to have an alternative. So ironic, it feels as thought Microsoft is playing as search’s Wordperfect (with a stronger cash cow in it’s pocket) to Google’s MS Office.
On Yahoo’s side, it makes total sense to focus on other areas. Bartz has a tougher task since, now that she’s resolved her search issue, it’s much more important what she’s going to do with all of Yahoo’s assets. That’s where she can really change the game, but who knows if that’s going to happen.
yeah, .. history repeated itself and now, it Yahoo turn.
..remember back Altavista, once was king of search. Then turned 2 portal 2 compete w/ Yahoo and failed.
Then, Inktomi powered 85% of the web including Yahoo, Aol. Google was a tiny company no one know.
.then, Google came push out Ink to powered Yahoo. Then FAST TRANSFER a great search engine tried competed against Google.
.Yahoo, then saw the THREAT from Google so they unfollow Google and bought Inktomi, AllTheWeb/Altavista and the Pioneer in Paid Search Advertising Overture.
.THIS WAS PROBABLY THE BEST YAHOO’S MOVE IN THE CHESS GAME. where Yahoo play an upon hand 2 its competitors.
.Which, help Yahoo became powerhouse and left MS desperately running around.
.Google took year 2 developed Adword & Adsense.
.TODAY, YAHOO MAKE ANOTHER, PROBABLY LAST MOVE. maybe, they have the chance 2 come back but more likely the chess game close 2 the end 4 Yahoo and the beginning new chapter.
Google VS Microsoft
I think google still gonna win. Google is like the major search engine. Teaming up against google can have an effect on the market. Depends what the people want to see. I think they should butt out cause google has gone so popular that there apps, other search engine that use its results, and the fact its becoming a popular verb “google it!” it seems that they just want a bigger piece of the pie when eventually it might just die out like yahoo has just done. Now with just two major search engines its a matter who’s gonna be who’s side. Obviously in the area I’m in google is gonna win cause no one uses bing but I guess it might be a fight to the death. The future is to blurry so to speak to tell if the deal was a win win situtation. I think google shouldn’t be worried.
Again, many are missing a huge point in this deal, IMHO.
Hardly a mention of the fact that ….
Each company will maintain its own separate display advertising business and sales force.
This deal has now drawn a line in the sand in relation to display and the future of RTB in a Globally scaled, OPEN Marketplace. The future of display is clearly defined.
This will hurt Google big time.
After the deal, MS will be Ranked 2nd (just all of a sudden), but what did MS pay for it?
NOTHING?
Big surprise!
88% revenue to Yahoo! is not from MS pocket. It is Yahoo’s money. Currently, Yahoo is realizing the 100% profit. After deal, they will take way 88% and so share goes to MS as well. Though Yahoo will save the expense of running Search!
But from MS perspective,
1. They are ranked 2nd
2. They will reach 28% market share which they could have never imagined otherwise
3. Whole lot of technologies from Yahoo!
4. Last but not least, a big platform to invest and Zoom in
and everything ZERO cost!
Yahoo has just gone crazy…..
They did not SELL out Search
They just GAVE UP Search!
Yahoo – a big looser
MS – lucky to have Carol who gave a boatloads of technology for nothing
Google – the leader
Such a stupid deal. Yahoo is so bad at it. Definitely they could have never come up with a strategy to get close to Google or even retain their market. They are good at loosing. Let them get out of first.
I don’t think GAVE UP is the proper term here. I think HANDED OVER is more apropriate.
yeah, i agree. this deal is more like yahoo expenses 4 microsoft gain. what was yahoo ceo thinking when signing the deal?
.why would you gave up the 2nd position 4 the weaker competitor in search and exchange 4 a guaranteed of ur lifeline?
… yeah, this show that’s yahoo is too panic and desperate to save its own existence. why gave up search, the most lucrative sector when they said we going to stay focus?
.not a good strategy.
.yahoo should have truck a deal with microsoft with a none exclusive deal. still keep search technology in house and still allow both companies to compete against google.
.yahoo should have REBRAND its search engine like microsoft succeeded with bing.
.4 MICROSOFT, it’s a happiest day!!!!!!! just win a lottery.
.and after all, it did not need to spend 45billions on Yahoo.
yahoo definitely made a biggest mistake. it would better off selling itself or fighting to the death than making ridiculous deal like this one.
I think I’m not smart enough to understand this deal. I keep seeing Ballmer telling Bartz:
“Ok, so I get full exclusive access to all you search and advertising technology code. I hire the key engineers and executives from your search staff to work for me and for the next 10 year build the best search experience money can buy.
While I’m doing that I don’t want to have to worry about this huge ad sales staff so you can sell all my ads with me getting 100% of the search ads displayed in all my properties and 12% of the search ads displayed in all your properties.
Oh and forget about the “boat loads of money” you wanted. I demmand all this for free.
But don’t think that you won’t get any. If you don’t sell the expected ammount of ads we will cover the diference for the next 18 months (in a 10 year deal).”
This gives MS control over userdata that Google and Facebook can only dream about. They get user data from the internet *and* they own the operating system and have unlimited control over userdata on your computer.
MSFT winner here.
Don’t see what Yhoo is getting out of this.
They are paying 12% of their ad revenues that they didn’t have to pay before.
so basically Carol has granted MS access to ‘361 patent… as everyone is saying MS is the real winner here, search might finally be profitable for them
also how come handing over search to another company represent ‘real choice’???? they are cutting off their technology … FML
Yahoo! has given up on search. They never seriously committed to compete in search to begin with, unfortunately. This is probably the best they can do at this point, given the harsh reality of the situation.