Microsoft, Yahoo join forces to challenge Google

Microsoft, Yahoo join forces to challenge Google

Thursday, 30 July 2009, 01:44 Hrs   |    1 Comments
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Washington: Tech giants Microsoft and Yahoo reached a long-awaited partnership Wednesday in a bid to challenge Google, which holds a 65 percent market share in online search.

Under a 10-year deal, websites from both companies would use Microsoft's Bing search engine, which could now integrate Yahoo's considerable trove of search technology.

Yahoo, in turn, would handle worldwide sales of premium search-related advertising for both companies.

In exchange for becoming Yahoo's sole search provider - and gaining access to its massive traffic - Microsoft would pay its partner 88 percent of the search revenues generated on Yahoo sites.

"This agreement comes with boatloads of value for Yahoo, our users and the industry, and I believe it establishes the foundation for a new era of Internet innovation and development," said Yahoo Chief Executive Carol Bartz in a statement.

According to Microsoft Chief Executive Steve Ballmer, the deal will allow Microsoft to "create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company".

And in a dig against online search market leader Google, the companies said in a joint statement that "advertisers no longer have to rely on one company that dominates more than 70 percent of all search".

A Yahoo-Microsoft partnership would mean about 28 percent of Internet searches would be performed on their combined platform, according to figures from ratings firm comScore Inc.

That would still be less than half of the about 65 percent market share of Google Inc., which has long dominated the search space.

Last year, Microsoft attempted to buy Yahoo for more than $45 billion, an unsolicited bid Yahoo rejected, but the Redmond, Washington-based software giant has long had Yahoo's search business at the top of its wish list, and the two had reportedly been in discussions for months.

Yahoo estimated the deal would add $500 million to its annual operating profit, as well as saving it around $275 million in expenses related to developing and maintaining its own search technology.
Source: IANS
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Reader's comments(1)
1: This itself shows the incompetence of Microsoft as well as Yahoo. They are proving it yet again that they cant win over Google. I am not against Microsoft like the other lads who use Windows day in n out and they still bitch about Windows and supports (Leopard)Mac.
I am worried because Microsoft never put any effort to take it forward from the place they developed it. They got into the comfort zone, thus no innovation happened.
Same thing is happening with Yahoo also. Where as Google is still coming with new stuff and venturing into different business. In the browser market they have a market share of 2% already, u have to consider that fact that they are an infant. They gonna come up with OS. Am sure its gonna become a pain for Microsoft. On the other hand Microsoft came up with Vista, everyday it comes up with new bugs (I heard it has around thousands of bugs. Now they are coming up with Windows-8. I am curious to see what extra they are bringing in to compete with the chrome OS. I wish Windows 8 will be a killer stuff.
I still feel like writing, but enough for now :-)
Posted by:Visakh - 29 Jul, 2009