Roundup: Microsoft-Yahoo Search Deal

Well the big news of the day has been the big Microsoft-Yahoo Search deal that was announced this morning. All the search marketing blogs, tech blogs, news sites, and everyone else has been talking about it. With the avalanche of deal information and opinion out there, we thought we’d wade through the content and post some links to the stories and posts we found to be the most interesting.

Before we get to the round-up list, let’s quickly go over the basics of the deal.

The term of the agreement is 10 years.
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;
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;
Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites;
Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88 percent of search revenue generated on Yahoo!’s O&O sites during the first five years of the agreement; and
- Yahoo! will continue to syndicate its existing search affiliate partnerships
- Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country;
At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million; and
The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

It is important to note, that the integration of Bing and Yahoo core search could take up to 24 months to complete. So this isn’t going to turn your SEO campaign on it’s head overnight, but it is important to keep tabs on the merger over the coming months and begin to develop a strategy to address the new, more important Bing search.