by
Cindy Kerber Spellman ~
July 29th, 2009
After years of discussion and speculation around a business deal between Microsoft and Yahoo!, an agreement has been reached that strengthens both companies and creates heightened competition against Google. In the deal, Microsoft’s new search engine, Bing, will power Yahoo! search on all of Yahoo!’s sites, while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.
Other key highlights of the agreement:
– The deal will become official in 2010, pending regulatory approval, with a term of agreement for 10 years. Full implementation is expected within 24 months following approval.
– Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network.
– The agreement impacts each company’s search business only. The companies will continue to compete in other areas and maintain their own separate display advertising business and sales force, as well as individual web properties, products, email, instant messaging and other aspects of their business.
The companies have set up an informational website with more details about the agreement at: www.choicevalueinnovation.com.
Our Thoughts
As the search marketing strategist for many of the world’s largest advertisers, GroupM Search and its brands welcome this deal and the value it brings to our clients. We’ve always said that competition, scale and innovation are important to large advertisers in any market. Microsoft is back on the map with their innovation and technology developments which have catapulted Bing into a compelling alternative with improved consumer experience and advertiser opportunities. That technology, coupled with the audience and service Yahoo! brings, has the potential to deliver a more relevant search platform with better efficiencies and opportunities for advertisers, as well as increased volume in search queries.
“We like what we’ve seen with the enhancements behind Bing, and know that Yahoo has a terrific structure for agency service within their sales force. If focus continues on development in these areas, then the industry can expect a more competitive marketplace than ever before,” said Chris Copeland, CEO, GroupM Search – The Americas.
“A 30 percent market share is a giant step forward, and Microsoft is the better positioned company between the two against Google to develop technology. The success of the agreement and growth for the companies will lie in the innovation Microsoft is hinting to with Bing and how that will come to life.”
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