A Microsoft-Yahoo partnership has finally emerged. On Wednesday, they signed a ten-year deal which Microsoft hopes will help it challenge Google as the world's No.1 search engine.
Microsoft CEO Steve Ballmer signs a global search agreement with Yahoo! CEO Carol Bartz at Yahoo!'s Sunnyvale headquarters on July 29, 2009. [Photo by Yahoo! Inc.]
The deal allows Microsoft to take over search responsibilities on Yahoo's popular site.
With the extended reach Microsoft can better introduce its recently upgraded search engine Bing to more people.
Steve Ballmer, Microsoft CEO, said, "Right now there is one company that really dominates that worldwide market for search and online advertising. The partnership we are announcing today will help to create a stronger number 2 and increase competition in the search area."
Yahoo will keep 88 percent of the revenue from all ads that run alongside search requests on its site. It also has the right to sell search ads on some Microsoft sites. Yahoo estimates the deal will boost its annual operating profit by 500 million US dollars.
Ed Moltzen, Managing Editor for CRN Magazine, said, "This is an absolute steal for Microsoft, Yahoo wins the ability to stay an independent company with a huge new friend, a huge new ally in Microsoft, which can help it concentrate on other things where they think they can be more successful."
Even with Yahoo's help, Microsoft has to make up lots of ground.
Combined, Microsoft and Yahoo handle 28 percent of the Internet searches in the United States, well behind Google's 65 percent,
Google is even more dominant in the rest of the world, with a global share of 67 percent compared to a combined 11 percent for Microsoft and Yahoo.
(CCTV July 30, 2009)