Microsoft & Yahoo Officially Unveil Their Partnership On New Website

Microsoft has officially announced that it will form a strategic alliance with Yahoo, the former darling of the internet and original global web portal, to fight Google's hegemony in the online search market.

Interestingly, both companies went to great lengths to show that their partnership will be a strong one. They set up a common website at choicevalueinnovation.com (domain name registered on the 21st of July) where they provide with a few details as well as an official press release about the deal.

Yahoo! and Microsoft say that the agreement will "improve the Web search experience for users and advertisers, and deliver sustained innovation to the industry". Specifically, Microsoft will power Yahoo! search while Yahoo! will take over Microsoft's sales force.

Although the press release did not mention Google by name, it did say that advertisers " no longer have to rely on one company that dominates more than 70 percent of all search".

The partnership between the two companies is set to last 10 years and paert of the deal is that Microsoft will acquire an exclusive 10 year license to Yahoo!'s core search technologies.

Furthermore, Bing will become the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo dumped Google search technology back in 2004 and before that Inktomi back in 2000.

Yahoo! CEO Carol Bartz said in the press statement that "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"

Yahoo expects the gross operating income generated by the "Projected Incremental Impact of Microsoft Search Agreement" to reach $275 million within 24 month.

Our Comments

Steve Ballmer, Microsoft's Chief Executive Officer, added that "Through this agreement with Yahoo!, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company"

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