Clash Of The Titans: Yahoo OK To Team Up With Microsoft

Both the U.S. Department of Justice and European Commission have approved the deal to have Microsoft’s Bing search engine power Yahoo’s search results for a slice of ad revenue.  At present, Google, Inc., the leading name in web search, controls approximately 70% of the search market.  However, Bing made significant progress, gaining a respectable amount of the search market in a relatively quick time.

Under this deal, Bing’s underlying search engine will be used to run the search queries on all Yahoo! web properties; conversely, Yahoo! will be responsible of the overall sales responsibilities for both its and Microsoft’s internet platforms.  This deal makes a good deal of sense, given that the of the remaining ~30% of the search market, Yahoo! and Microsoft together account for 28%.

Additionally, Microsoft’s AdCenter software will act as self-service search advertising tool for both companies.  In this way, Microsoft may begin to viably compete with Google in the internet advertising field.  Google’s AdSense is currently the leader in internet advertising.

On the user end, Yahoo! still maintain the overall look and feel on its pages, with the only major change being that Bing will carry out the actual queries under the hood.

Under the ad-sharing deal, Microsoft will pay Yahoo! for traffic from Yahoo’s sites; Yahoo will retain 88% of the search revenue generated on its pages for the first five years of the deal.

Yahoo, Inc., having fallen to Google over the past decade, was seen to have been bought out by Microsoft but plans for the $45 billion buyout were squelched in no small part by the efforts of Yahoo! founder Jerry Yang.  Yang was formerly the CEO of Yahoo! until he was replaced last year by Carol Bartz (pictured above).