by Brian Smith, on August 4th, 2009
The long awaited deal between Yahoo! and Microsoft is done. You can find out all about the deal on the mini-site that Microsoft created. Besides hearing about disgruntled investors, you’ll read all about how this will or will not change the search war against Google.
Here are the main points as summarized at Search Engine Land:
-Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms [Note from Danny Sullivan: Exclusive suggests Yahoo itself won't be able to use the technology or develop it, which means after 10 years, what's left probably isn't that useful]
-Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.
-Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process.
-Each company will maintain its own separate display advertising business and sales force.
-Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology. [Note from Danny: AOL used similar words about how it would somehow make Google-powered search "better" despite not owning the technology. People still went to Google].
While Yahoo! will still concentrate on some of it’s great properties like Finance or News, the deal says nothing about what happens with Yahoo! Shopping. The problem I see is that Cashback is a core part of Bing, and therefore I’m not sure that cutting Cashback listings out of a Bing search experience would make sense to Microsoft. That would be like cutting off one of Bing’s 4 legs…although with this deal, Bing just got a couple new legs that don’t depend on a $100m advertising effort. So, something to think about going forward (realize that going forward is 1yr+ away).
I’d currently vote to keep Yahoo! Shopping as it’s a small group that makes a boatload of cash. However, Bing is onto something with its cashback efforts – especially in this troubled economy – so perhaps there is a hybrid opportunity in the future. I often hate the hybrid model because it can confuse users and merchants, but merchants have pulled back their listings on the shopping engines and are excited to take advantage of a CPA model (yes, CPC numbers can be backed out to CPA numbers, but CPA is just easier to grok and lower risk to basic merchants). Or if Google Product Search goes to an affiliate or cashback model and Yahoo! Shopping is forced along this route, I’m sure Bing will be there waiting to assist.
Tags: Comparison Engines
