Microsoft in Partnership with Yahoo
The two companies have established a revenue sharing agreement
Microsoft and Yahoo announced a partnership that will essentially stick Microsoft's recently relaunched search engine Bing in place of Yahoo search and Yahoo's ad sales in place of Microsoft's.
The terms of the initial agreement will last for 10 years wherein Bing will be the "exclusive algorithmic search and paid search platform" for all Yahoo sites. The companies aren't giving up on Yahoo's search, though, as Microsoft will also have a 10-year license to Yahoo's core search technologies and the ability integrate Yahoo's search mojo into Bing. Yahoo will also be responsible for ad sales for both companies' premium advertisers, though self-serve advertising will still be handled by Microsoft's AdCenter.
The two companies have established a revenue sharing agreement on the traffic generated on Yahoo's sites, and Microsoft has agreed to pay traffic acquisition costs at 88 percent of search revenue generated by Yahoo during the first five years. Microsoft will also guarantee the revenue per search for Yahoo-owned and -operated sites for the first 18 months. The companies emphasized that the deal protects consumer privacy and limits the data shared between the companies to the minimum needed to improve the platforms.
Though the announcement makes no mention of Google, it does acknowledge the search and advertising giant in passing. "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," the companies said in a statement.
This is what Microhoo is referring to when it claims there will be greater competition—from their perspective, they'll be a bigger force to be reckoned with when it comes to battling Google, though it means that there will be fewer independent players from the consumer perspective.
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