The Microhoo / Yahsoft Partnership Goes Ahead

Microsoft Yahoo partnershipThe Microsoft-Yahoo partnership has been approved following eight months of legal shenanigans. The deal announced last year has been unconditionally cleared by the US Department of Justice and the European Commission. Australia, Brazil and Canada have already agreed the terms, although both companies are still working with regulators in Japan, Korea, and Taiwan.

Outspoken Microsoft CEO Steve Ballmer stated:

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.

Under the terms of the 10-year deal:

  • Microsoft will be able to select any of Yahoo’s search technologies and a number of key employees.
  • Yahoo will adopt Microsoft’s Bing search engine. Engineers will begin integration shortly and hope to have the work completed by the end of 2010 in the US. Other territories will follow soon after.
  • Although Microsoft will provide the back-end technology, Yahoo will control how results are presented on their own site.
  • Yahoo will concentrate on selling premium search advertising and will receive 88% of the revenue raised.
  • The future for Yahoo search-related projects such as BOSS (Build your Own Search Service) and YQL (Yahoo Query Language) are uncertain, however, Microsoft is unlikely to abandon popular systems which increase market share.

The partnership is an all-out assault on Google. Neither Microsoft or Yahoo has achieved much success separately, even though the Redmond giant has invested $5 billion over the past 4 years. Google made no official comment and did not oppose the partnership.

The deal was warmly received by NASDAQ investors. Microsoft and Yahoo shares rose 1.2% and 0.7% respectively. But Google also increased by 1.1%, so there’s little business intelligence to be ascertained from those figures.

In the US, Google has a little over 65% market share. Yahoo has 17% and Bing 11%, so the partnership should give a combined US share of just under 30%. Google is far more dominant elsewhere and handles almost 90% of UK searches.

In some ways, the deal offers less choice for web users. Yahoo’s search engine is very good and it’s a shame to see it go. However, shared technology and increased usage should help Microsoft improve Bing’s search engine results. Will that persuade users to migrate from Google? Only time will tell…

What do you think? Will the partnership succeed and does it offer viable competition to Google?

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  • http://www.wplancer.com banago

    I don’t think they are a threat to Google’s dominance, however I’m geld to see such collaborations as I hope it will take the web search one step further and will encourage innovation on both ends.

  • http://www.krues8dr.com krues8dr

    The best part of this? Paving the way to the inevitable Apple-Google singularity. And then the world will change forever.

  • http://www.rwtconsultants.com israelisassi

    Probably won’t have much of an effect on Google given their ever-increasing ties with the government, becoming an ISP, and receiving approval to sell electricity.

  • Potsed

    What concerns me more about this partnership is the really great open source innititives that yahoo is involved in, like YUI. What are the plans for those.

  • Above Post

    Google would never buy Apple.

  • zenracer

    Badda bing, badda soft. The worst of two worlds. Microsoftee has a way of screwing up everything they get their hands on. This one will only boost Googlie in the long run.

  • W2ttsy

    google’s advantage is simple. Their service works. Microsoft and Yahoo’s search pages both suffer from increasing bloat and have been since day 1. After loading up each search engine i encountered the following:

    google: loads up the familiar search page and the cursor is automatically focused into the search dialogue. perfect way for me to enter my query and get my results (which is exactly what i wanted)

    yahoo: Worst page ever.. has hardly changed since i used to use it or alta vista back in the late 90s. for some reason the page jumped down to the news section after it loaded and the search field was placed off the page above the fold. without scrolling, i couldnt search so lost interest

    bing: this was sort of a hybrid of google and yahoo and some sort of flickr page? I got distracted flicking through the scenery photos and forgot why i was even there in the first place. They were better than yahoo, but then at the end of the day i got distracted…

    Until both MS and yahoo take a leaf from googles book, they will continue to suffer in the race for search dominance. Google were smart to abstract their content away into separate sections of the site and then insert those results in with the organic listings… That way things like news, maps, finance, video and images are provided in the most relevant way, based on your search results…

  • NetNerd85

    “In the US, Google has a little over 65% market share.”… that’s it!? LMAO, that’s a huge shock. Apple and Google? the most evil companies in the world? That’s like Nazi’s and Commies being bunk mates… not going happen.

  • http://www.optimalworks.net/ Craig Buckler

    The biggest problem for Microhoo is that it’s tough to beat Google’s search results. Even if Bing was 10% better, that would be imperceivable to most people. Google originally rose to glory because it’s results beat other search engines by a considerable and noticeable margin back in 1998.

    Bing and Yahoo may have nice effects and features but they don’t add any real value. They need to out-engineer Google to have a chance. Or Google needs to start doing evil stuff and lose trust (er, like Buzz!)

  • http://www.sitepoint.com ShayneTilley

    The content in the post aside — great title Craig. You had me at Microhoo.

  • W2ttsy

    @ NetNerd85 “In the US, Google has a little over 65% market share.”… that’s it!? LMAO, that’s a huge shock. Apple and Google? the most evil companies in the world? That’s like Nazi’s and Commies being bunk mates… not going happen.

    so not only have you misquoted Apple and Google as being the most evil companies in the world? Because they foster innovation and have subsequently increased their market share as a result? Wow, I guess business is best left to the altruistic individuals in the world who don’t do it for the cash or the glory or the market share? Also apple and google share no traits with the communist or nazi party. I would have thought they are both prime examples of the capitalist market. Delivering cheap products to maximise profits….

    But the biggest insult is that you managed to skew a major part of the second world war in your poor analogy. The germans and the russians both worked together to capture poland. It wasn’t until the germans decided that taking the USSR would halt the allied assault that the german/USSR pact fell apart. The irony of the whole situation is that the two pronged war was the downfall of the german empire. If they’d held their lines instead of advancing into russia, then the USSR might have been less inclined to assist the allies…

  • http://www.cssispoetry.com BlakeAnthony

    A couple weeks ago, I heard about Microsoft and Yahoo colloborating together. At the time, I didn’t think it was going to happen. But it seems now that the papers went through, and everything is good to go.

    I’m pretty excited about Microsoft and Yahoo working together. We talk, text, Facebook, Skype, chat and what else is better then that? We Bing, we bing, we bing.

    I love Microsoft, and everything they have done to improve on User Technology including, Software Development.

  • http://www.optimalworks.net/ Craig Buckler

    @USPatriot

    how much does SitePoint fund you?

    I get paid by the number of trolls my articles attract. Thanks for the bonus!

  • Niubi

    Seems like a good merger, but the name is horrible! Can’t they just have made up a new name? Microhoo sounds like a vague term of insult, and Yahsoft… well, let’s not go there. It would be just as bad if eBay were to merge with, say, DubLi and the resulting company was called eBli or Dubay. Both of which, let’s face it, don’t really roll off the tongue.

  • NetNerd85

    @W2ttsy

    You took my point too far, too literal. Obviously what I was saying was inflated, inaccurate and pretty silly. The point, Apple and Google would never join forces. I’m glad someone else around here is interested in WW2 history though =)

  • Nenad

    Yahsoft, not to be mistaken for Jahsoft, the Jamaican software company…