Microsoft, Yahoo team up to ding Google with Bing - Microsoft Corp. has finally roped Yahoo Inc. into an Internet search partnership, capping a convoluted pursuit that dragged on for

saltedm8 · 29th July 2009, 06:19 PM

Microsoft Corp. has finally roped Yahoo Inc. into an Internet search partnership, capping a convoluted pursuit that dragged on for years and setting the stage for them to make a joint assault against the dominance of Google Inc.The 10-year deal announced Wednesday gives Microsoft access to the Internet's second-largest search engine audience, beefing up the software maker's arsenal as it tries to better confront Google, which is by far the leader in online search and advertising.

Microsoft didn't have to give Yahoo an upfront payment to make it happen, as many Yahoo investors had been counting on ever since Microsoft dangled $1 billion last summer in an attempt to forge a search partnership then.

Google tried to stop Yahoo from falling into Microsoft's camp. Last year it formed its own proposed search advertising deal with Yahoo, only to be forced to retreat from that alliance after U.S. antitrust officials threatened to sue.

Now the extended reach Microsoft is gaining will let it introduce its recently upgraded search engine, called Bing, to more people. The Redmond, Washington-based software maker believes Bing is just as good, if not better, than Google's search engine. Taking over search responsibilities on Yahoo's popular site gives Microsoft a better chance to convert Web surfers who had been using Google by force of habit.
"Microsoft and Yahoo know there's so much more that search could be," said Microsoft Chief Executive Steve Ballmer. "This agreement gives us the scale and resources to create the future of search."
Even with Yahoo's help, Microsoft has its work cut out. Combined, Microsoft and Yahoo handle 28 percent of the Internet searches in the United States, well behind Google's 65 percent, according to online measurement firm comScore Inc. 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.

In return for turning the keys to its search engine over to Bing, Yahoo will keep 88 percent of the revenue from all ads that run alongside search requests on its site for the first five years of the deal. Yahoo also will have the right to sell search ads on some Microsoft sites.

Yahoo estimated the deal will boost its annual operating profit by $500 million and save the Sunnyvale, California-based company about $200 million on annual capital expenditures because it won't have to invest as much in its own search technology. An unspecified number of Yahoo engineers will lose their jobs as the company scales back, Yahoo Chief Executive Carol Bartz told analysts in a Wednesday conference call.
The deal isn't expected to close until early next year, and then it could take another two years before all the pieces of the partnership are in place. The companies first will give antitrust regulators time to review the possible effects on the Internet ad market. Then they will need time to stitch together their different technologies.

Shares of Yahoo plunged $1.84, or 10.7 percent, to $15.38 in afternoon trading, as investors expressed disappointment over the fact that the company won't be getting an immediate windfall. Microsoft shares edged up 3 cents to $23.50 while Google shares shed $5.16, or 1.2 percent, to $434.69.

"I think the market hasn't figured out that there's not much I can do with an upfront payment," Bartz said in a Wednesday interview.

"It's very clear that (in this deal) I get virtually all my revenue at no cost. That's what's important on an ongoing basis. A one-time upfront payment, what am I going to do with it? Collect interest on it every year? That doesn't help me with" Yahoo's finances.

The alliance could give Yahoo a chance to recoup some of the money it squandered in May 2008, when it turned down a chance to sell the entire company to Microsoft for $47.5 billion. Yahoo's market value currently stands at about $22 billion, and the company, while profitable, is coming off a quarter in which revenue slid 13 percent.

The two rivals began talking about a possible partnership as far back as 2005 before Microsoft intensified the courtship with last year's attempt to buy Yahoo.

It took Bartz just six months to strike a deal with Microsoft — something that neither of her predecessors, Terry Semel and Yahoo co-founder Jerry Yang, seemed interested in doing.

Shortly after her arrival, Bartz made it clear she was willing to farm out Yahoo's search engine for "boatloads of money" as long as she as thought the company would still receive adequate information about its users' interests. Although Yahoo won't get any immediate cash, Bartz predicted the deal will still be a boon for the company.

"This agreement comes with boatloads of value for Yahoo, our users, and the industry," Bartz said.

Under the agreement, Yahoo will have limited access to the data on users' searches — which yield insights that can be used to pick out ads more likely to pique a person's interest. The value of that information is why Microsoft wants to process more search requests.

Like Yahoo, Microsoft has invested billions in its search technology during the past decade, yet remained a distant third in market share while its online losses piled up. The company's Internet services division lost $2.3 billion in the fiscal year ending in June, nearly doubling from the previous year.

Microsoft is counting on Bing, unveiled last month, to turn things around.

Bing has been getting mostly positive reviews and picking up slightly more traffic with the help of a $100 million marketing campaign. Analysts believe Bing's successful debut pushed Microsoft to reopen negotiations so it could expose its search engine improvements to a wider audience more quickly.

"The reason the deal happened now is the recent success of Bing. I think it put pressure on Yahoo, as well as Yahoo not being able to turn it around on its own," said Gartner Inc. analyst Neil MacDonald.
Microsoft and Yahoo are bracing for scrutiny into whether the combination would have an adverse effect on competition in the online ad market.

The U.S. Justice Department spent five months dissecting last year's proposed search advertising partnership between Google and Yahoo before concluding that it would give Google too much control over the market. And under the Obama administration, the Justice Department is promising to pore over deals more rigorously than it did when the proposed Google-Yahoo partnership came up.
Microsoft used its lobbying muscle to spearhead the campaign against Google teaming up with Yahoo, so it wouldn't be a surprise if Google turned the tables.

"There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users," Google spokesman Adam Kovacevich said. "We're interested to learn more about the deal."

A key lawmaker on antitrust issues said the Yahoo-Microsoft plan "warrants our careful scrutiny." Sen. Herb Kohl, a Wisconsin Democrat, said the Senate antitrust subcommittee he chairs will review the deal "because of the potentially far-reaching consequences for consumers and advertisers and our concern about dampening the innovation we have come to expect from a competitive high-tech industry."
Peter Kaplan, a spokesman for the Federal Trade Commission, declined to comment. A Justice Department spokeswoman couldn't immediately be reached.

Ballmer expects that support from online advertisers and Web publishers who would like a stronger rival to Google will eclipse any objections that Google might raise.

"We think this is one of these cases where the coming together will produce more effective market competition, not less," he told analysts in Wednesday's conference call.

Microsoft is doubling down on Internet search at the same time Google is attacking Microsoft's bread-and-butter business of software for personal computers.

Google is working on a free operating system for inexpensive PCs in a move that could threaten Microsoft's Windows franchise. If it gains traction, Google's alternative, called Chrome OS, could divert revenue from Microsoft while the software maker is trying to grab more money pouring into search advertising.

Chrome OS isn't supposed to hit the market until the second half of next year. That means Microsoft could get a head start on Google in the duel to steal each other's financial thunder.

Jason · 29th July 2009, 08:17 PM

Sounds like good news for Yahoo, Google have nothing to worry about. They are extending into new markets and run popular advertising. Losing a few percent of the search market will not negatively impact them.

I am more interested in how Bing will work if it is put into Yahoo. Will Bing still exist as its own entity? If it does how does this affect the deal with Yahoo? Surely Bing competes with Yahoo? Thus its continuing existence seems to go against the deal outlines above.

Also 2 years for complete partnership is like 20 years in the web world. They really need to get this sorted out far quicker.

CloudedVision · 30th July 2009, 04:28 PM

I'm guessing all Yahoo searches will now be a yahoo-themed bing search. (But still giving credit to bing) So bing will definitely boost its market share.... But still, Google will never die!

A800 · 1st August 2009, 09:44 PM

So Microsoft's got another way to give Google a good kick in the backside?

Google will win!

MinatureCookie · 1st August 2009, 10:46 PM

Google really just can't be taken down. Not for a long time anyway. I mean, for God's sake "Google it", nothing else sounds good. "Yahoo it", no. "Bing it", no. "Windows Live it", pff.

Jason · 2nd August 2009, 08:01 AM

Quote:

Originally Posted by CloudedVision

But still, Google will never die!

Quote:

Originally Posted by A800

Google will win!

Quote:

Originally Posted by MinatureCookie

Google really just can't be taken down. Not for a long time anyway.

Honestly, this move is not about taking Google down, its about trying to provide some competition in the area of online search. StatCounter says that globally Google has a 87.62 percent share of search market.

The goal of Yahoo and Microsoft is not to destroy Google, it is simply to take a larger slice of the pie. If they can knock Google down to 65% it will be a massive success for them.

As for their chances, I would say they are fairly good to be honest. Its Microsoft... if they set the default homepage on IE to yahoo, it will make a massive difference. Also combined the company has enough buying power to get yahoo as the default homepage on factory built machines. There is certainly plenty of scope for growth here.

A800 · 4th August 2009, 12:33 AM

Google have always been the best web search. When I was in school, my classes was told to Google everything we didn't know when we had IT.

saltedm8 · 4th August 2009, 08:11 AM

as a continuation of this, here is a bit more

Bing steals another 1% off Google

Microsoft's efforts to try and claw back some of Google's utter dominance in the search arena look to be paying off as it nabbed another one per cent of the US market.
The company's Bing search engine climbed to 9.43 per cent of the US market in July, up from 8.23 per cent last June.

When you add in the numbers from Yahoo! after the two companies agreed a joint search and advertising deal, the portion grows to a shade over 20 per cent.
Google's dominance suffered slightly as a result, with the company's US market share slipping from 77.54 per cent to 78.48 per cent, and globally it slipped to 89.23 per cent in July from 89.80 per cent in June.

Taking time
The deal with Yahoo! will take time to complete, so the joint numbers are currently just for reference.

Steve Ballmer said on a conference call that the process will cost over $200 million (£118 million) and will likely be completed over the next two years.
However internet data company StatCounter, which released the results, does not think the statistics mean Google is in any real trouble:
"Bing continues to make slow but steady progress but the combined Yahoo figures suggest that the deal announced last week will have to demonstrate major future synergies if it is to make any dent in Google's dominance."

WelshStew · 8th August 2009, 09:16 AM

Yep, at the end of the day its all about market share. The higher the market share the more adverts, and therefore the more revenue, the search companies will generate.

29th July 2009, 06:19 PM	#1
saltedm8 Join Date: Dec 2008 Location: Kent Uk Posts: 1,595 Blog Entries: 6 Thanks: 15 Thanked 49 Times in 49 Posts Expertise: (X)HTML / CSS Experience: Professional	Microsoft, Yahoo team up to ding Google with Bing Microsoft Corp. has finally roped Yahoo Inc. into an Internet search partnership, capping a convoluted pursuit that dragged on for years and setting the stage for them to make a joint assault against the dominance of Google Inc.The 10-year deal announced Wednesday gives Microsoft access to the Internet's second-largest search engine audience, beefing up the software maker's arsenal as it tries to better confront Google, which is by far the leader in online search and advertising. Microsoft didn't have to give Yahoo an upfront payment to make it happen, as many Yahoo investors had been counting on ever since Microsoft dangled $1 billion last summer in an attempt to forge a search partnership then. Google tried to stop Yahoo from falling into Microsoft's camp. Last year it formed its own proposed search advertising deal with Yahoo, only to be forced to retreat from that alliance after U.S. antitrust officials threatened to sue. Now the extended reach Microsoft is gaining will let it introduce its recently upgraded search engine, called Bing, to more people. The Redmond, Washington-based software maker believes Bing is just as good, if not better, than Google's search engine. Taking over search responsibilities on Yahoo's popular site gives Microsoft a better chance to convert Web surfers who had been using Google by force of habit. "Microsoft and Yahoo know there's so much more that search could be," said Microsoft Chief Executive Steve Ballmer. "This agreement gives us the scale and resources to create the future of search." Even with Yahoo's help, Microsoft has its work cut out. Combined, Microsoft and Yahoo handle 28 percent of the Internet searches in the United States, well behind Google's 65 percent, according to online measurement firm comScore Inc. 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. In return for turning the keys to its search engine over to Bing, Yahoo will keep 88 percent of the revenue from all ads that run alongside search requests on its site for the first five years of the deal. Yahoo also will have the right to sell search ads on some Microsoft sites. Yahoo estimated the deal will boost its annual operating profit by $500 million and save the Sunnyvale, California-based company about $200 million on annual capital expenditures because it won't have to invest as much in its own search technology. An unspecified number of Yahoo engineers will lose their jobs as the company scales back, Yahoo Chief Executive Carol Bartz told analysts in a Wednesday conference call. The deal isn't expected to close until early next year, and then it could take another two years before all the pieces of the partnership are in place. The companies first will give antitrust regulators time to review the possible effects on the Internet ad market. Then they will need time to stitch together their different technologies. Shares of Yahoo plunged $1.84, or 10.7 percent, to $15.38 in afternoon trading, as investors expressed disappointment over the fact that the company won't be getting an immediate windfall. Microsoft shares edged up 3 cents to $23.50 while Google shares shed $5.16, or 1.2 percent, to $434.69. "I think the market hasn't figured out that there's not much I can do with an upfront payment," Bartz said in a Wednesday interview. "It's very clear that (in this deal) I get virtually all my revenue at no cost. That's what's important on an ongoing basis. A one-time upfront payment, what am I going to do with it? Collect interest on it every year? That doesn't help me with" Yahoo's finances. The alliance could give Yahoo a chance to recoup some of the money it squandered in May 2008, when it turned down a chance to sell the entire company to Microsoft for $47.5 billion. Yahoo's market value currently stands at about $22 billion, and the company, while profitable, is coming off a quarter in which revenue slid 13 percent. The two rivals began talking about a possible partnership as far back as 2005 before Microsoft intensified the courtship with last year's attempt to buy Yahoo. It took Bartz just six months to strike a deal with Microsoft — something that neither of her predecessors, Terry Semel and Yahoo co-founder Jerry Yang, seemed interested in doing. Shortly after her arrival, Bartz made it clear she was willing to farm out Yahoo's search engine for "boatloads of money" as long as she as thought the company would still receive adequate information about its users' interests. Although Yahoo won't get any immediate cash, Bartz predicted the deal will still be a boon for the company. "This agreement comes with boatloads of value for Yahoo, our users, and the industry," Bartz said. Under the agreement, Yahoo will have limited access to the data on users' searches — which yield insights that can be used to pick out ads more likely to pique a person's interest. The value of that information is why Microsoft wants to process more search requests. Like Yahoo, Microsoft has invested billions in its search technology during the past decade, yet remained a distant third in market share while its online losses piled up. The company's Internet services division lost $2.3 billion in the fiscal year ending in June, nearly doubling from the previous year. Microsoft is counting on Bing, unveiled last month, to turn things around. Bing has been getting mostly positive reviews and picking up slightly more traffic with the help of a $100 million marketing campaign. Analysts believe Bing's successful debut pushed Microsoft to reopen negotiations so it could expose its search engine improvements to a wider audience more quickly. "The reason the deal happened now is the recent success of Bing. I think it put pressure on Yahoo, as well as Yahoo not being able to turn it around on its own," said Gartner Inc. analyst Neil MacDonald. Microsoft and Yahoo are bracing for scrutiny into whether the combination would have an adverse effect on competition in the online ad market. The U.S. Justice Department spent five months dissecting last year's proposed search advertising partnership between Google and Yahoo before concluding that it would give Google too much control over the market. And under the Obama administration, the Justice Department is promising to pore over deals more rigorously than it did when the proposed Google-Yahoo partnership came up. Microsoft used its lobbying muscle to spearhead the campaign against Google teaming up with Yahoo, so it wouldn't be a surprise if Google turned the tables. "There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users," Google spokesman Adam Kovacevich said. "We're interested to learn more about the deal." A key lawmaker on antitrust issues said the Yahoo-Microsoft plan "warrants our careful scrutiny." Sen. Herb Kohl, a Wisconsin Democrat, said the Senate antitrust subcommittee he chairs will review the deal "because of the potentially far-reaching consequences for consumers and advertisers and our concern about dampening the innovation we have come to expect from a competitive high-tech industry." Peter Kaplan, a spokesman for the Federal Trade Commission, declined to comment. A Justice Department spokeswoman couldn't immediately be reached. Ballmer expects that support from online advertisers and Web publishers who would like a stronger rival to Google will eclipse any objections that Google might raise. "We think this is one of these cases where the coming together will produce more effective market competition, not less," he told analysts in Wednesday's conference call. Microsoft is doubling down on Internet search at the same time Google is attacking Microsoft's bread-and-butter business of software for personal computers. Google is working on a free operating system for inexpensive PCs in a move that could threaten Microsoft's Windows franchise. If it gains traction, Google's alternative, called Chrome OS, could divert revenue from Microsoft while the software maker is trying to grab more money pouring into search advertising. Chrome OS isn't supposed to hit the market until the second half of next year. That means Microsoft could get a head start on Google in the duel to steal each other's financial thunder. __________________ web design kent

30th July 2009, 04:28 PM	#3
CloudedVision Join Date: Jan 2009 Location: Your Imagination Posts: 729 Blog Entries: 4 Thanks: 1 Thanked 27 Times in 26 Posts Expertise: PHP Experience: Professional	I'm guessing all Yahoo searches will now be a yahoo-themed bing search. (But still giving credit to bing) So bing will definitely boost its market share.... But still, Google will never die! __________________ Panthr - Web Design and Development

1st August 2009, 09:44 PM	#4
A800 Member Join Date: Jan 2009 Location: Kent, UK Posts: 113 Blog Entries: 11 Thanks: 0 Thanked 1 Time in 1 Post Expertise: (X)HTML / CSS Experience: Quite Good	So Microsoft's got another way to give Google a good kick in the backside? Google will win! __________________ Boris Johnson for future PM!

1st August 2009, 10:46 PM	#5
MinatureCookie Member Join Date: Jan 2009 Location: Hampshire, UK Posts: 226 Thanks: 3 Thanked 6 Times in 6 Posts Expertise: (X)HTML / CSS Experience: Professional	Google really just can't be taken down. Not for a long time anyway. I mean, for God's sake "Google it", nothing else sounds good. "Yahoo it", no. "Bing it", no. "Windows Live it", pff. __________________ MinatureCookie.com

4th August 2009, 12:33 AM	#7
A800 Member Join Date: Jan 2009 Location: Kent, UK Posts: 113 Blog Entries: 11 Thanks: 0 Thanked 1 Time in 1 Post Expertise: (X)HTML / CSS Experience: Quite Good	Google have always been the best web search. When I was in school, my classes was told to Google everything we didn't know when we had IT. __________________ Boris Johnson for future PM!

29th July 2009, 08:17 PM	#2
Jason Member Join Date: Dec 2008 Location: Hatfield, UK Posts: 170 Thanks: 1 Thanked 8 Times in 8 Posts Expertise: PHP Experience: Professional	Sounds like good news for Yahoo, Google have nothing to worry about. They are extending into new markets and run popular advertising. Losing a few percent of the search market will not negatively impact them. I am more interested in how Bing will work if it is put into Yahoo. Will Bing still exist as its own entity? If it does how does this affect the deal with Yahoo? Surely Bing competes with Yahoo? Thus its continuing existence seems to go against the deal outlines above. Also 2 years for complete partnership is like 20 years in the web world. They really need to get this sorted out far quicker.

4th August 2009, 08:11 AM	#8
saltedm8 Join Date: Dec 2008 Location: Kent Uk Posts: 1,595 Blog Entries: 6 Thanks: 15 Thanked 49 Times in 49 Posts Expertise: (X)HTML / CSS Experience: Professional	as a continuation of this, here is a bit more Bing steals another 1% off Google Microsoft's efforts to try and claw back some of Google's utter dominance in the search arena look to be paying off as it nabbed another one per cent of the US market. The company's Bing search engine climbed to 9.43 per cent of the US market in July, up from 8.23 per cent last June. When you add in the numbers from Yahoo! after the two companies agreed a joint search and advertising deal, the portion grows to a shade over 20 per cent. Google's dominance suffered slightly as a result, with the company's US market share slipping from 77.54 per cent to 78.48 per cent, and globally it slipped to 89.23 per cent in July from 89.80 per cent in June. Taking time The deal with Yahoo! will take time to complete, so the joint numbers are currently just for reference. Steve Ballmer said on a conference call that the process will cost over $200 million (£118 million) and will likely be completed over the next two years. However internet data company StatCounter, which released the results, does not think the statistics mean Google is in any real trouble: "Bing continues to make slow but steady progress but the combined Yahoo figures suggest that the deal announced last week will have to demonstrate major future synergies if it is to make any dent in Google's dominance." __________________ web design kent

8th August 2009, 09:16 AM	#9
WelshStew Join Date: Dec 2008 Posts: 1,844 Blog Entries: 3 Thanks: 13 Thanked 36 Times in 34 Posts Expertise: (X)HTML / CSS Experience: Professional	Yep, at the end of the day its all about market share. The higher the market share the more adverts, and therefore the more revenue, the search companies will generate. __________________ WelshStew follow me on twitter here \| WelshStew - Web Design & Web Development \| Motorhome hire uk

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