Microsoft and Yahoo have reached an agreement on an online search and advertising partnership after months of speculation.Instead of a buyout, as originally planned by Microsoft, the two will enter into a revenue sharing agreement. It is expected to be announced officially today (29 July 2009).
In the spring of 2008, Microsoft made a $47.5 billion hostile offer to buy Yahoo after on-and-off talks about a merger had led nowhere. After a bruising, four-month battle, Microsoft abandoned the offer. Anger among Yahoo shareholders led to a management change and the replacement of its co-founder Jerry Yang by Carol Bartz, an outsider who is now Yahoo's chief executive.
The partnership deal comes after months of intermittent talks about joining forces in the online advertising market to challenge Google.
Under the expected deal, Microsoft's recently-launched Bing search engine will drive Yahoo's searches, according to Advertising Age. Yahoo will handle advertising sales using Microsoft technology.
The new Microsoft-Yahoo pact is a measured step that represents a pragmatic division of duties between the two companies. Under the pact, Microsoft will provide the underlying search technology on Yahoo's popular Web sites.
The deal provides a lift for Microsoft's recent overhaul of its search engine, renamed Bing, which has won praise and favorable reviews, after years of falling further and further behind Google.
For Yahoo, the move furthers the strategy under Ms. Bartz to focus the company on its strengths as a producer of Web media sites, from finance to sports, as a marketer and a leader in on-line display advertising that accompanies published Web sites.
Wednesday, July 29, 2009
Yahoo vs Microsoft Deal : Google Eagle Eye
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