Yahoo - Microsoft deal in next 24 hours
Under the term of the deal, Microsoft, which made a failed takeover bid of $47.5 billion for Yahoo last year, will have access to the volume of search queries that run through Yahoo's search engine. Yahoo has agreed to use Microsoft's new Bing search engine on its own sites. Also, Yahoo will handle the advertising sales, using Microsoft technology. Yahoo Chief Executive Carol Bartz said, "I think Bing is actually a good product and Microsoft deserves kudos for Bing."
The deal would give Bing a boost in competing with Google's search engine. Google's search engine dominates the marketplace with 65 percent of the U.S. Internet searches, according to the figures provided by research firm ComScore. It is followed by Yahoo with 19.6 percent and Microsoft with 8.4 percent.
According to a technology blog, All Things Digital, the deal is "less sweeping than originally conceived" and does not involve upfront payments by Microsoft to Yahoo. "This makes the deal much smaller than ones previously envisioned, which included Microsoft taking over both Yahoo's search and its text-based search advertising businesses, in exchange for large payments and guaranteed revenue."
However, the deal may also face privacy issues, said Colin Gillis, an Analyst at Brigantine Advisors. "Any agreement where Microsoft powers search and shares the search data to Yahoo! is open to scrutiny from the U.S. and EU justice departments," he added. It can trigger the federal regulation limiting the ability of companies like Yahoo to collect data from users' searches and share it with partners, which would remove a key advantage of the partnership, said Gillis.
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