First announced last summer but only given the official seal of approval by the European Commission and US Department of Justice today, Microsoft and Yahoo! can now officially begin their 10-year search deal.
The European Commission claimed that the deal between the two online giants to fuse their search efforts would not “significantly impede effective competition”. The Telegraph and others are reporting that the terms of the contract will see Microsoft’s search engine Bing, power Yahoo!’s search engine. In return Yahoo! will be responsible for selling the advertising around the combined search efforts. Outwardly to a user, there will be no discernable difference, as both search operations will continue have their own presence.
Slightly taking the wind out of both companies sails, it should be pointed out that the reason the European Commission has given this the go ahead is that Microsoft and Yahoo! currently account for less than 10 per cent of the search market in Europe, guess who accounts for the other 90%? Gimme a ‘G’…
Executives at both companies though hoping that the deal will help increase competition as they merge their search and advertising capabilities. It may also mean that the Irish HQs of both companies can have joint Christmas parties and maybe even co-ordinate ‘pizza Fridays’. Possibly arrange some inter-office foosball tournaments? Anyway, Steve Ballmer, Microsoft’s chief executive, said: “”I believe that together, Microsoft and Yahoo! will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”
Carol Bartz, Yahoo!’s chief executive described the deal as a “breakthrough search alliance”.
The companies are aiming to fuse their search technologies by the end of 2010 and hope to have reorganised their advertising arrangements accordingly by that time too – although they recognise this may take longer and carry over into 2011. The deal will see Microsoft will keep 12 per cent of the search engine revenues created by Yahoo!’s website for the first five years and pay the remaining 88 per cent to Yahoo! during this period.
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