Microsoft and Yahoo have made a strategic alliance to create a stronger rival to the industry powerhouse Google.
The Microsoft-Yahoo pact is a measured step that represents a pragmatic division of duties between the two.
Microsoft will provide the underlying search technology on Yahoo’s popular websites. The deal provides a lift for Microsoft’s recent overhaul of its search engine, renamed Bing, which has won praise and favorable reviews.
For Yahoo, the move furthers the strategy of the company on its strengths as a producer of web media sites, from finance to sports, as a marketer and a leader in online display advertising that accompanies published websites.
The terms of the 10 year agreement calls for Microsoft to license Yahoo’s search technologies, and Yahoo will initially receive a lucrative 88 percent of search-generated ad revenue. The advertising work will be split. Yahoo will be the exclusive ad force for premium search advertisers who bargain to negotiate rates and deals.
Steven A Ballmer said: “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.
In search business, Google has a worth $12 billion a year in the United States alone, at the expense of both Yahoo and Microsoft. The combination of Yahoo and Microsoft in online search creates a far more powerful counterweight to Google.
Good for the advertisers.
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Tags: bing, google share in search maket, Microsoft Yahoo partnership, Yahoo Search
