Microsoft-Yahoo Search Deal
Microsoft and Yahoo have now officially announced the search deal that has been rumored for long. Through the pact, Bing will become the default search engine on Yahoo, creating a search player with close to 30% market share of search queries, compared with Google's 65%, according to ComScore data.
This will have major repercussions for the online advertising industry, where both Microsoft and Yahoo are strongholds and carry a lot of weight. Likely, it will take months if not years to align these important businesses. As Yahoo CEO Carol Bartz indicated in the press release, on the flip side advertisers and publishers would benefit significantly from a unified platform and the promise of scalability allround.
The deal will take Yahoo out of the search-technology business so it can focus on media, marketing services and sales. Microsoft, especially if it can cede search sales duties to Yahoo, becomes more of a technology and infrastructure company, its disciplines better aligned with its strengths.
Yahoo comes in with a larger share of the search business than Microsoft, but it doesn't have as much financial firepower as Google or Microsoft, and observers say it will have trouble defending its share without a deal. Microsoft, on the other hand, has a vast capacity to spend on search, but an unproven ability to take share from anyone but Yahoo. Yahoo declined to comment on the deal.
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