VIDEO: Microsoft and Yahoo announce search deal
10-year partnership finally reached
29 July 2009 14:10 GMT / By Amy-Mae Elliott
Microsoft and Yahoo have finally announced an agreement that will see the two giants team up against Google on web and search.
"In simple terms" the companies say Microsoft will now power Yahoo search via Bing, while Yahoo will become the exclusive worldwide relationship sales force for both companies' search advertisers.
The end result of months of on-off negotiations between the companies, that began with Microsoft making an unsolicited bid for Yahoo, is an attempt to try and break Google's dominance on the market, apparently needing two companies to team up to try and become a "stronger number two".
The 10-year deal will see Microsoft acquiring an exclusive license to Yahoo's "core search technologies" and the ability to integrate Yahoo's search tech into its web search platforms. Meanwhile Yahoo will become the sales force for both companies.
Money-wise, Microsoft will compensate Yahoo through a revenue sharing agreement at a rate of 88% for the first 5 years of the agreement.
With an eye on the compulsory regulatory review, in a statement, the companies say they will remain competitors in other areas: "The agreement does not cover each company’s Web properties and products, email, instant messaging, display advertising, or any other aspect of the companies’ businesses. In those areas, the companies will continue to compete vigorously".
The video above shows Microsoft's CEO, Steve Ballmer, discussing the deal and its implications for the market.
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