UKFast internet news - February 2010

feature article

Microsoft-Yahoo alliance approved

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Microsoft's plans to challenge Google have gathered speed with both European and US regulators approving their partnership with Yahoo!

First announced in July 2009, the proposed 10-year partnership aims to see Microsoft increase their share of the search engine industry. With Microsoft and Yahoo currently controlling less than 10 per cent of the European market to Google's 90 per cent, the European Commission hopes the deal will allow Microsoft "to become a stronger competitor to Google".

Under the deal, which was approved without restrictions by both the European Commission and US Department of Justice, Yahoo! will use Microsoft's Bing search engine technology, whilst providing the main advertising sales team for Bing. Microsoft will also retain 12 per cent of the search engine revenues generated via Yahoo!'s website for the first five years

A joint statement said, "Once the transition is in place, Yahoo! and Microsoft will each represent and provide customer support to different advertiser segments. Yahoo!'s sales team will exclusively represent and support high-volume advertisers, search engine optimisation and search engine marketing agencies, and resellers and their clients. Microsoft will represent and support self-service advertisers."

Microsoft CEO Steve Ballmer said, "I believe that together, Microsoft and Yahoo! will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers."

While Microsoft and Yahoo! plan to begin the partnership in the coming days and have it completed by early 2012, they will continue to work with regulators in South Korea, Taiwan and Japan before the deal is also launched there.

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