After months of speculation, Yahoo and Microsoft finally sealed the deal. In a nutshell, the deal allows Microsoft to integrate Yahoo’s existing search technologies with Bing. It would also establish Microsoft’s AdCenter as a de facto self serving ad platform for both the networks. The prices for all search ads will continue to be set by AdCenter’s automated auction process.bingyahooYahoo will retain its display advertising business and also become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.

This clearly allows Microsoft to reach out to a larger base and take a considerable share in the worldwide search traffic. Microsoft will also have immense opportunity to establish Bing and its self serving advertising plaftform, giving serious competition to Google

Some other key highlights of the agreement as per the official press release:

•    The 10 year agreement entitles Microsoft a 10 year exclusive license to integrate Yahoo’s core search technology with its own

•    Yahoo and Microsoft would continue to maintain their sales force and advertising business

•    Yahoo to get remuneration from Microsoft through a revenue sharing agreement based on the traffic generated from owned and operated (O&O) sites as well as affiliates

•    Guaranteed revenue per search (RPS) for Yahoo! in every country for the first 18 months after initial implementation

The two companies would however continue to compete in all the other areas such as email, display advertising, instant messaging and other web properties.

The deal was announced after months of speculation and denials by both the parties.
Both Microsoft and Yahoo! have been contemplating over ways to curtail the dominance of Google in the search market.

Many analysts, industry experts and even shareholders of Yahoo! were not very happy with the deal as there is no cash payment involved. The agreement would have to get regulatory approval before closing.

The agreement opens up a new front to tackle Google’s supremacy. The new alliance will also affect search advertising and user experience to a great extent. Whether it would be successful in slicing a portion of Google’s share is yet to be seen.

Is this the end of Google’s domination? Digimouth welcomes its readers to share their views on this agreement.