Yahoo, Microsoft finally tie the knot

Jake Widman
Thursday, 30 July 2009 00:00

IT Industry - Strategy

The long and troubled courtship that began last year has concluded in a deal that makes Microsoft's Bing the engine behind Yahoo searches, while Yahoo will handle the sales for search advertisers.

The deal, which pretty much follows the outlines described earlier this week, "will accelerate the pace and breadth of innovation by combining both companies' complementary strengths and search platforms into a market competitor with the scale to fuel sustained development in search and search advertising," according to the announcement.

"This agreement comes with boatloads of value for Yahoo!, our users, and the industry," said Yahoo! CEO Carol Bartz.

And Microsoft CEO Steve Ballmer said, "With our new Bing search platform, we've created breakthrough innovation and features. This agreement with Yahoo! will provide the scale we need to deliver even more rapid advances in relevancy and usefulness."

Carol Bartz and Steve Ballmer sign the deal, which apparently includes forcing Ballmer to use a giant Yahoo-colored pen. (Photo by Yahoo. Click for larger image.)

The agreement is set to run for ten years, during which time Microsoft will have an exclusive license to Yahoo's search technologies and can work them into Bing.

Bing will be the search engine, but Yahoo's search technology will be used for display ads.

And Yahoo will provide the sales efforts for premium search advertisers. "Self-serve advertising" will come from Microsoft's AdCenter, and each company will maintain its own display ad business.

For more on the shape of Microhoo, see Page 2 .