Yahoo – Microsoft Search Deal Announced

Well, it’s been a long time coming, but the expected deal between Yahoo & Microsoft has finally been announced – with one aim, being more effective at taking on Google.

Let’s cut to the chase then, and outline the details of the deal:

- Microsoft will power Yahoo’s search results with their Bing technology – for both natural and paid search;
- Microsoft’s AdCenter and automated auction process will be used to serve PPC ads for both properties;
- Yahoo will become the exclusive worldwide sales force for premium search advertisers;
- Yahoo will innovate and own the look of user search experience on Yahoo! sites - it’ll just be powered by Microsoft technology;
- The deal will last for 10 years, and also involves revenue-sharing.
- Industry and regulatory protocol means the deal should be closed by early 2010.

Looking back at where this deal has come from then, when stories first surfaced in late 2008, the conclusion of those talks was a definite “no, it’s not happening”. Two major events have occurred since then to change this stance.

- Jerry Yang left as CEO, after boardroom disagreement about the Microsoft deal, and Carol Bartz was appointed as his replacement.
- More recently, Microsoft launched Bing to replace MSN search, following their acquisition of Powerset for $100m. To date, this has been a success story, and proved their search worth to Yahoo.

How will this affect the day-to-day running of search campaigns?

Majorly it seems, whilst definitive details of operation are yet to be confirmed, there are two major things to consider.

Firstly, we’ll be dealing with Bing search results for SEO, with the amount of traffic driven by both Yahoo & Bing itself, this now needs to become a consideration in any SEO project. It could well not be a case of “optimise for Google, and rankings on the others will follow” anymore. However, Google’s dominance will continue – nearing 90% market share here in the UK – means only 8% for the newly formed Yahsoft / Micoo! alliance. It seems then, our Yankee friends over the pond will be affected much more, with Yahoo commanding much more of the market over there.

Secondly, paid search will be done through Microsoft’s AdCenter, which in most corners will be seen with a sigh of relief. Yahoo’s inability to launch an offline editor (originally touted for Q1 this year) seriously slows down any campaign management tasks of a decent size such as refreshing creatives across an account. Microsoft did launch one, which showed off a distinctive Office-feel, although still in a limited private beta, shows signs of promise. What’s more, they’re much better placed to continue investing the cash - and with a significant jump in clicks coming through the system, are likely to (pretty please, Mr. Ballmer).

For further information on the deal, take a watch of Carol Bartz explaining it in the below video, or check out the official press release.

Carol Bartz on our deal with Microsoft @ Yahoo! Video