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July 29, 2009

It’s Official: Bing to Power Yahoo! Search

News has just broken on Twitter that Microsoft and Yahoo! have finally closed a deal where Bing will power Yahoo! search results while Yahoo! will become the worldwide sales force for both companies’ search advertising.

@Bing broke the news with this tweet:

“Bing. Yahoo! Two great tastes that are now going to be great together. Check out http://bit.ly/9eUh7″

According to the official press release, the key terms of the agreement are as follows:

  • The term of the agreement is 10 years;
  • Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing Web search platforms;
  • Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology;
  • Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process;
  • Each company will maintain its own separate display advertising business and sales force;
  • Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology;
  • Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites;
  • Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88 percent of search revenue generated on Yahoo!’s O&O sites during the first five years of the agreement; and
  • Yahoo! will continue to syndicate its existing search affiliate partnerships.
  • Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country;
  • At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million; and
  • The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

Yahoo! and Microsoft will host a conference call with Yahoo! CEO Carol Bartz and Microsoft CEO Steve Ballmer to discuss the agreement at 5:30 a.m. Pacific/8:30 a.m. Eastern Time today.

14 Responses to “It’s Official: Bing to Power Yahoo! Search

    […] More details available on my SiteProNews blog post: It’s Official: Bing to Power Yahoo! Search. […]

    […] Weeks after Microsoft’s search engine changed its name to Bing, both Microsoft and number two search engine Yahoo decided to form a partnership. The deal, a ten-year agreement between both search engines, essentially involves the search engine algorithm of Bing combined with the advertising of Yahoo to create a search engine prominent enough to make a dent in Google’s current dominance. According to an article published in the New York Times, the partnership will allow, as of now, a 28-percent hold in search engine traffic, although Google still has a two-thirds hold. For details, SiteProNews has more specifics on the partnerships between the search engines. […]

    avatar Steve Sims says:

    This is interesting news, but will anyone actually use it? What incentive is there to encourage users to move away from Google…

    avatar sri says:

    Wow! Finally Microsoft has reached a deal Yahoo for an internet search partnership. Will the newly announced deal between giants Microsoft and Yahoo be a good thing? Got to wait and see. But atleast Microsoft and Yahoo deal is straightforward and not complex at all and ofcourse, the negotiation talks have been going for long. I was just curious to know all the past negotiations between Microsoft and Yahoo so collected all the articles and links (more than 200) related to the current merger and the previous events or negotiations between Microsoft and Yahoo. If you are interested check the link below.
    http://markthispage.blogspot.com/2009/07/saga-of-microsoft-and-yahoo-from-2007.html

    avatar Carazoo.com India says:

    Lets see how it works. :-)

    avatar doug says:

    So, it sounds like Yahoo will be using Bing (MS) technology even though it will maintain the same Yahoo search marketing interface? Not sure what difference that will make in the search results, I hope the price doesn’t go too high though…we will see if it works, or if Google remains king as before.

    avatar kittu k says:

    wonder how itll affect SE optimizers, everybodys rankings r going to drop unless they rank in top 20 for both bing & yahoo..

    […] first thing that came to my mind when I heard about Caffeine was the Microhoo deal. It seems like too much of a coincidence that Google would allow a public preview of their new […]

    […] first thing that came to my mind when I heard about Caffeine was the Microhoo deal. It seems like too much of a coincidence that Google would allow a public preview of their new […]

    avatar Florida SEO Company says:

    The combination of both Bing & Yahoo makes interesting news, but will it be enough to even come close to taking market share away from the King Google? I’d love to see some healthy competition, but they’ve got to come up with some innovative, ground-breaking search features to even try and make a dent in the ‘Big G’

    avatar Web Designer - David Calvert says:

    Hmm, don’t think that anyone will really care. Google are the masters of search. Until someone decides to develop a vastly superior search engine that offers a better PPC/CPA model.

    avatar Website Development Harrow says:

    They both are combining to beat google in popularity but every search engine has unique strategy and if bing and yahoo will join then they lost their uniqueness.

    i think seo is only going to get harder

    avatar Eksee Biz » Microhoo Deal Given Thumbs Up to Proceed says:

    […] and Yahoo announced today that their planned Search Alliance has been given the go-ahead by the U.S. Department of Justice and the European Commission without […]

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