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Microsoft and Yahoo Strike Ten Year Deal

Posted on July 29, 2009 by Vanessa

Early this morning Microsoft and Yahoo made the official announcement of their plans to “join forces” in internet search marketing.  The partnership would effectively give the pair a 30 percent market share of U.S. search advertising, a little less than half of what Google’s current market share is, but a considerable increase for Microsoft’s present 8 percent stance in the market.  According to news sources under the arrangement, Microsoft Bing would "power" Yahoo search, while Yahoo would sell premium search advertising for both companies, using Microsoft's AdCenter system.  This deal will affect staff at Yahoo.  While neither company admitted that layoffs would continue the mention was hinted at in conversations with reporters and advertising for both companies will now be fulfilled by Microsoft’s AdCenter platform.

How do marketers feel about this though?  Zach, fellow blogger and manager of marketing, search and content at the Gordian Project says “This agreement displays the power of online search advertising and the dollars behind it, but what’s interesting is that Yahoo has opted to integrate someone else's search technology instead of their own therefore actually reducing the number of search competitors in the marketplace. Even though there is one big name in search, Google, I don’t know if fewer competitors is actually better? Has Yahoo really given up on search technology? Had search gotten to a place where it can't be improved? Will this alliance be able to take on the almighty Google? We will all be waiting to see, but it seems like they are so fixated on the dollars and the revenue aspect of search technology that they may be forgetting about all of the other aspects that can be incorporated into improving their technologies."

The two companies are still going to have to go through regulatory hearings, but seem to be prepared as they are already making claims that data will not be shared.  Either way marketers need to be prepared.


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