Microsoft to Power Yahoo Search

Posted on July 30, 2009

The long awaited Microsoft Yahoo deal has happened. Microsoft's recently launched Bing search engine will power the Yahoo search engine in a long term 10-year deal. The BBC reports that Yahoo will keep 88% of the revenues for search ad sales on for the first five years.

In return for ceding control of its search engine, Yahoo will get to keep 88% of the revenue from all search ad sales on its site for the first five years of the deal, and have the right to sell adverts on some Microsoft sites.

Yahoo's search team, meanwhile, will have to brace itself for job losses over the next two years. Some staff will transfer to Microsoft, others can stay on with Yahoo, but redundancies would be unavoidable, Yahoo chief executive Carol Bartz told the BBC.

The BBC also says the Microsoft-Yahoo deal wasn't possible until Jerry Yang departed.
The deal became possible after Yahoo's co-founder Jerry Yang stepped down as chief executive of the company late last year.

"Only a Yahoo outsider like Ms Bartz could do such a deal," said Tim Weber, business editor of the BBC News website.

The deal will give Microsoft a bigger piece of the search engine pie and make it more competitive with Google in search and search advertising.

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