I guess you guys already know from today’s Tech News about the official search partner between Microsoft and Yahoo. I did not want to talk more about it since it was only a inked agreement between Microsoft and Yahoo, and will not start till 2012(?) if the competitor (Of course, Google) won’t against through the regulators. And what kind of happiness it would bring to us? After all, it was to combine two declining search engines together which might lead to more search engine market decline. Think about it, Yahoo search is in the distance second place compared to Google in the search engine market. And now if they use Bing to replace Yahoo search, it is hard to see these Yahoo users will buy it. Even they are on Yahoo portal sites, but Google tool bar is everywhere anyway.
And anyhow, since I traced Mico-hoo events before, let me continue this topic one more time. There are some key components on the Microsoft and Yahoo deal:
- The deal is for 10 years.
- Microsoft will license Yahoo’s core search technologies for 10 years;
- Bing is the “exclusive algorithmic search and paid search platform for Yahoo sites’.
- Yahoo is the worldwide sales force for both companies. Self-serve and search advertising will be built on Microsoft’s AdCenter platform.
- Yahoo will own the user experience on its properties.
- Microsoft will pay traffic acquisition costs to Yahoo at a rate of 88 percent of search revenue on Yahoo sites for the first five years. Yahoo will continue its search affiliate partnerships. On a conference call, Ballmer said: ”We paid a high TAC rate. There’s no question. He added that the upside comes as Microsoft improves relevance due to more scale. “Our upside comes as execution really builds,” he said.
- “Some Yahoo engineers may move to Microsoft,” said Ballmer.
- Microsoft guarantees Yahoo’s owned and operated revenue per search in each country for 18 months;
- After 5 years, Microsoft can retake premium ad sales back from Yahoo.
- The implementation will occur within 2 years after regulatory approval.
Now let us sit back and watch what Google will re-act in the next few months.
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