Yahoo and Microsoft seal search ad deal
- Added:
- Jul 30, 2009
Yahoo and Microsoft have announced a long-rumoured internet search deal that will help the two companies take on chief rival Google.
The 10-year deal will see Microsoft's Bing search engine power the Yahoo website, while Yahoo will become the advertising sales team for Microsoft’s online services.
Self-serve advertising on both sites will be handled through Microsoft AdCenter. However Yahoo! will retain control of all premium search advertising sales across both firms sites.
The move marks the end of a long courtship between the two Internet giants, dating back to January 2008. Despite struggling to make profits in recent years, Yahoo rebuffed several takeover bids from Microsoft in an attempt to go it alone.
The finalised deal will give Yahoo 88% of the revenue from all search ad sales on its site for the first five years of the deal, and have the right to sell adverts on some Microsoft sites. Yahoo's search team will face job losses over the next two years as the company’s search technology is integrated into Bing.
Meanwhile, shares in Yahoo fell 12%, representing the company’s biggest drop since November 2008, after terms of the Microsoft tie-up were less favorable than analysts predicted.
Even with their combined audiences, Bing will still on have 28% market share of the search market. Google currently controls 65% of the market for search-engine queries in the US, with Yahoo accounting for about 20% and Microsoft a little over 8%, according to ComScore.
Last week both Yahoo and Microsoft posted online ad revenue declines through the second quarter of 14% and 16% respectively, days after Google revealed its ad revenues were up by 3% over the same period.
Microsoft -Yahoo Timeline
· January 2008: Microsoft offers to buy Yahoo for $44.6bn in cash and shares, later raised to $47.5bn
· May 2008: Microsoft walks away from the table after the two sides fail to agree on a price
· June 2008: Yahoo strikes a deal to use Google's technology, with Google ads appearing on some Yahoo search results
· November 2008: Google abandons the Yahoo deal after objections from anti-trust regulators in the US
· November 2008: Yahoo co-founder Jerry Yang stands down as the firm's boss
· April 2009: Yahoo says it will cut 5% of its workforce after quarterly profits drop sharply
· May 2009: Microsoft relaunches its own search engine, now branded bing.com
· July 2009: After new speculation, Microsoft and Yahoo finally announce a web search deal
Key facts about the three companies:
Microsoft:
Founded: 1975 by Bill Gates and Paul Allen to bring the Basic programming language to an early computer, the Altair 8800.
Headquarters: Redmond, Washington.
CEO: Steven A. Ballmer
Employees: 91,000
Earnings: $14.6 billion in profit and $58.4 billion in sales over the last four quarters.
Yahoo:
Founded: 1994 by Jerry Yang and David Filo as a guide to the World Wide Web.
Headquarters: Sunnyvale, California.
CEO: Carol Bartz
Employees: 13,000
Earnings: $11 million in profit and $6.75 billion in sales over the last four quarters.
Google:
Founded: 1998 by Larry Page and Sergey Brin to organize the world's information so more people could find and use it.
Headquarters: Mountain View, California.
CEO: Eric Schmidt
Employees: 19,800
Earnings: $4.63 billion in profit and $22.3 billion in sales over the last four quarters.
Document Actions
|
Digital Training Academy |
|
| Essential skills for today's marketers: boost your team's results with customised advanced digital marketing coaching from world class trainers at the Academy. |
Ask our tutors for more
|
Full details here...
|
|
Digital marketing audits |
|
|
Getting the best ROI from your websites, emails and online ads? Sure? Our digital marketing audits review your current and planned campaigns to find ways of cutting budgets without cutting impacts. |
|
Ask for more |
Full details here...
|
- Mobile ad networks
-
Apple's iAds Vs Google's AdMob- which do you think will be most succesful in the long term?
From the tutors at the Digital Training Academy
 |
Googled- End of the World as We Know It: Ken Aueleta |
 |
The Twitter Book: Tim O'Reilly |
 |
Me++: William J Mitchel |
 |
The Tipping Point: Malcolm Gladwell |
