Microsoft and Yahoo have now officially announced the search deal that has been rumored for long and finally confirmed by us and other news outlets yesterday evening.
Official press release (emphasis ours apart from title and subtitles):
Microsoft, Yahoo! Change Search Landscape
Global Deal Creates Better Choice for Consumers and AdvertisersSUNNYVALE, CA and REDMOND, WA — 29 July, 2009 — 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.
For Web users and advertisers, this deal will accelerate the pace and breadth of innovation by combining both companies’ complementary strengths and search platforms into a market competitor with the scale to fuel sustained development in search and search advertising. Users will find what they care about faster and with more personal relevance. Microsoft’s competitive search platforms will lead to more value for advertisers, better results for web publishers, and increased innovation and efficiency across the Internet.
Under this agreement, Yahoo! will focus on its core business of providing consumers with great experiences with the world’s favorite online destinations and Web products.“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. Finally, this deal will help us increase our investments in priority areas in winning audience properties, display advertising capabilities, and mobile experiences.”
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.
Microsoft CEO 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.”
“This deal fits the long-term strategic direction of Yahoo! to remain the world’s leading online media company and Carol Bartz has the full and unanimous support of the Yahoo! Board behind this deal,” said Roy Bostock, chairman, Yahoo! Inc. “This is a significant opportunity for us. Microsoft is an industry innovator in search, and it is a great opportunity for us to focus our investments in other areas critical to our future.”
The key terms of the agreement are as follows:
- 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.
The agreement does not cover each company’s web properties and products, email, instant messaging, display advertising, or any other aspect of the companies’ businesses. In those areas, the companies will continue to compete vigorously.
The transaction will be subject to regulatory review. The agreement entered into today anticipates that the parties will enter into more detailed definitive agreements prior to closing. Microsoft and Yahoo! expect the agreement to be closely reviewed by the industry and government regulators, and welcome questions. The companies are hopeful that closing can occur in early 2010.
The companies have established a website at http://www.choicevalueinnovation.com to provide consumers, advertisers and publishers with additional information about the benefits of the agreement.
Conference Call – 5:30 a.m. PDT, Wednesday, July 29
Yahoo! and Microsoft will host a conference call with Yahoo! CEO Carol Bartz and Microsoft CEO Steve Ballmer to discuss the agreement at 5:30 a.m. Pacific/8:30 a.m. Eastern Time today.To listen to the call, please dial 1-866-515-2908 in the U.S. and Canada; +1-617-399-5122 international, reservation number: 47968026. A live webcast of the call can be accessed through Yahoo!’s Investor Relations website at http://yhoo.client.shareholder.com/results.cfm.
The companies have also established a website at http://www.choicevalueinnovation.com to provide consumers, advertisers and publishers with additional information about the benefits of the agreement. In addition, an archive of the webcast will be available through the same link. An audio replay of the call will be available for two weeks following the conference call by calling 1-888-286-8010 in the U.S. and Canada; +1-617-801-6888 international, reservation number: 91217610.
Non-GAAP Financial Measures
This release refers to operating cash flow (operating income before depreciation, amortization of intangible assets, and stock-based compensation expense, or OCF), which is a non-GAAP financial measure. The most comparable GAAP measure is income from operations. The estimated annual OCF benefit of $275 million included in this press release is the estimated annual benefit in income from operations of $500 million less approximately $225 million of estimated annual savings in depreciation, amortization and stock-based compensation expense.
MS and Yahoo! – Nicely done!
The partnership between Microsoft and Yahoo would help the two companies to compete with the dominant Google in the search market….
lmao…
Yep, two failed search engines combining forces.
Watch out Google!
Maybe they should buy Altavista too? Ask.com?
The church of Googlentology is going down!
Do you think bing will become an adjective?
A 10 years agreement? Wow, just wow, that’s like what? 300 years in the web world?
Yahoo are the biggest losers in this deal, especially after refusing billions last year. Fools…
IMO completely agree with the 10 year agreement. What were they thinking =X
two losers coming together can’t do anything
this deal brings microsoft a step closer to google.
its exciting to see the SEARCH market smoking again………..can expect many innovations
PS: common on google quit sleeping like a log and bring something radical to the table
this seems interesting !!
microhoo will make bing a more valuable player, not just for seos
another great timing from microsoft, 5:30 a.m PDT
I will still continue to use google.
finally advertisers might have an alternative to google…let’s hope
RIP Yahoo Search Engine
Bing rocks!
Let’s all hope they wont screw it up again
IMO Thats a win-win-win agreement.
Great step for Microsoft , great step for yahoo and great step for the users.
LOL! What an idiot.
Yes, you are, not him.
So the ever growing competition between Google and MS is open big time now. The next thing to look is, will it be a big success story or will be similar to AOL-Google deal. but a 10 year agreement is something which I am really interesting as 10 years is a huge time in www. Let us see what other surprises MS has in it’s mind.
finally…its been done. But still along way to catch up google
Now, that will give some competition to Google..
How so? I fail to see it.
Two wrongs don’t make a right.
Haha good one.
offcourse they do:
-1*-1=1
But still the worst deal in yahoo’s history, and another win for microsoft.
The partnership between Microsoft and Yahoo would help the two companies to compete with the dominant Google in the search market….
lmao…
You just keep laughing your ass off and come back in a couple of years and say that statement…
Both Microsoft and Yahoo are bleeding money online, they can’t compete with Google separately, so when combined they will magically know what they are doing?
I think that’s called synergies.
Shouldn’t Yahoo be paying Microsoft, rather than the other way round here?
And Whats up with http://choiceva...innovation.com? I think that URL can be repurposed for all generic M&A activities.
Come to think of it, is this stage 1 of M&A, Redmond acquiring Yahoo?
What is the combined search share for the MicroHoo platform?
Here they go. So they did it, eh!
how many times are they going to change their search providers. hopefully 10 years is a long times
i am worried whats going to happen to Yahoo Boss ! hope they don’t can that thing.
A classic case of outsourcing. In this case Microsoft is the Search Provider and Yahoo is the Advertising Sales provider.
so, now we have two companies that are terrible at managing search engines teaming up on search — brilliant!
What will be the next strategy for yahoo and msn to compete with Google?
I love that logo you did hahahah
A happy day for Microsoft and Yahoo shareholders such as myself.
You’re happy your Y! stock went down?
I wonder what Bing is going to be named in 10 years…
MSN Search, Windows Live Search, Live Search, Bing, ??
Probably Google, because they wont be around in a few years. So it will be just Google, the only search engine.
Like two senior citizens eloping and running off to a seniors home.
Users are becoming savvy and the death of that little white box is just a few years away. People dont search like they used too….they “locate”. mobile phones take over as most used “locator device” in just a few years as pc sales fall. Search is sooooooooo blind. Begin with “Location” and you have a Destiny.
Having now done a search for all of your useless videos, and seen your incredibly stupid assertion that your list of URLs is worth anything, all i can say is that I am now dumber than I was before and I would love to get those wasted minutes back.
I was trying to find some reason not to hate you and your comments, but I can’t. You are a useless blowhard and you really don’t know anything. Face it, no one, I repeat no one, cares about your “locator” crap. If they did, people would buy your URLs, but they haven’t because they, like your ideas, are a waste of time.
Would have expected MS to take advantage of the Yahoo portal’s traffic and try and push Silverlight into the deal somehow. The only reason this occurs to me is that on the press release website they’re using mms:// protocol… strange for something MS is involved in.
According to me it wont make much of a difference as google a become a very local name. It would take a lot of time for Bing+Yahoo to capture the search space. This will surely change the entire face search market. I am waiting for google’s move on this.
This isn’t going to change anything. Non-story, IMHO.
So, that means people have to use AdCenter for both Yahoo and Bing paid search? Oh dear.
The only thing that sounds cool about this is that yahoo might have those videos that start playing in their SERPs when you mouse over them
Most interesting is MSFT AdCenter is only live in 4 markets: US UK France Singapore. The rest of Bing currently is monetized BY YAHOO. Big markets like Japan Australia etc. So…is Microsoft going to take over Panama or port those advertisers into a non-existing platform??
Google is not going anywhere. While Yahoo has a very high profile in foreign countries, Google is still the world’s number 1 search engine, and that won’t change overnight. Bing + Yahoo need do something dramatic, their search engine needs to be a household name before they even think about taking over Google. Bing is a great search engine, but is adding Yahoo going to raise its profile and make it a household name? I doubt it. http://ziggytek.com/
It seems pretty obvious that Microsoft is trying to leverage Yahoo’s advertising sales force and web properties to leverage to drive revenue around Bing’s search technology. They dont have to “take over” Google for this to work. Search is a multi-billion dollar market; increasing market share by only a few percentage points will have a huge impact on the bottom line of each company.
Oh wow, you go Yahoo!
RT
http://www.anon-web-tools.tk
This is a new beginning for Search Engine Competition. Let the battle begin!
Y! Engineers not happy – look for mass exodus of talent. Y! is dumping its best technology in the deal. Should have been the other way around – Y! Search powering Bing while M$ handles ad customers.
You probably have one big shot to really take a chunk of users away from Google. They’re betting on this is their shot. Now, rather than later is the way to go. Its gonna get interesting.
Look everyone, google sells your info! Whats in a search “What about thousands of pages per search querry ” and if you do the exact same search google/yahoo 99.9% Same. But Yahoo will not sell off my info to their partners and dont forget who is the most visited web site Yahoo.
About time..
Yahoo and Microsoft are both internet veterans. I use a lot of Google services including search, and love them. But like someone stated before, there are a lot more avenues beyond just searching to be captured.
But to think that the two can’t compete with Google is just ignorance. There is and always will be developing data and physical technologies.
To think these rich pigs with plenty of battle experience are done is ridiculous. I’m sure Google isn’t going anywhere, but there will always be competition. They just have the upper hand right now.
it’s good that the merger will bring some competition to the almighty Google.
and i also find it interesting that Microsoft if fronting much of the operation costs…
This is just too funny. First, Yahoo doesn’t accept the deal for I don’t know HOW much more than they were worth. Second, they lose a lot of money. Third, Bing comes out and it’s like “Oh, wait. Maybe we should reconsider. This is sooo cool! Google doesn’t stand a chance!”
I wish the companies much luck but Google got to where it is today from giving a great service to consumers AND advertisers (1 of the best in the world btw) and continually innovates with web apps, Chrome, Chrome OS, and even the upcoming Google Wave.
70-80% market share vs. 5% for Bing and whatever else Yahoo takes. That’s gonna be a tough one…
This sounds like an interesting development in the field of Search Engines.
I’ve just made the deal map. please give me your feedback.
http://twitpic.com/c1zem
Well, they didn’t say “more choice” thats for sure… Wonder what the anti-trust investigators will do.
This is a long time in the make and I wish you well… something had to happen after all.
Here here, you retards. Some significant competition to Google is a good thing — IT IS GOOD FOR YOU. Yes, with this partnership, Bing has much more reach and visibility; thus, it represents a significant competitor with more potential.
Separate, Yahoo! Search and Microsoft Bing would have gone nowhere but fade away slowly.