Yahoo Search to Be Bing Powered

Posted on July 31, 2009

Microsoft and Yahoo have cut a 10-year deal that will see Microsoft's Bing search engine powering Yahoo's search results. Bing has been received positively and has been slowly gaining search marketshare. This probably helped convince Yahoo to do the deal with Microsoft.

The 10-year deal shifts control of Yahoo search results and ads to Microsoft, which will use Yahoo's better-trafficked site as a platform for its new search engine, Bing. Microsoft will pay for the expensive infrastructure it requires to run search technology, freeing up Yahoo's cash for that company's other operations. Microsoft paid no cash up front, and investors think Yahoo got the bum end of the deal - that company's stock plunged 12 percent the day it was announced.

The investors are probably right: Unless Yahoo's new CEO, Carol Bartz, can work miracles on Yahoo's other products, the company might regret getting out of the search business. In the long term, Microsoft and Yahoo probably had no choice but to band together against Google, which controls a monstrous share of the search market (nearly 70 percent). But in the short term, it could mean a tough restructuring that affects morale all over Silicon Valley.

Reuters reports that Yahoo is also looking at mining tweets to provide real-time data in addition to search results from Bing. Bing also has a tweet search tools called BingTweets.

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