But the partnership between the second and third biggest search engine providers is by no means as simple as Microsoft’s ill-fated bid to buy Yahoo outright for $31 per share in January 2008.
Who’s in charge?
In a nutshell, Microsoft has reached an agreement that will see its new search engine Bing become the exclusive algorithmic search and paid search platform across Yahoo’s sites.
Microsoft’s AdCenter platform will also become the pay-per-click advertising portal of choice for both companies.
However, Yahoo’s worldwide relationship sales force will continue to look after its own premium search offering – and importantly it will also take over Microsoft’s responsibilities in this area.
A decade is a lifetime
The deal is scheduled to run for ten years, which as every SEO marketer knows is a lifetime on the internet. After all, go back a decade and Yahoo was an online search leader while Google was just starting out.
Search market share
Now Google has a remarkable 65 per cent share of the US search market in the latest comScore figures, while Yahoo has 19.6 per cent (incidentally, Microsoft has just 8.4 per cent).
The turnaround is even more stark in the UK – Google enjoys 90.6 per cent of searches according to Hitwise, while Yahoo has just 3.9 per cent (Microsoft lags even further behind on 2.4 per cent).
Reception to the deal
So what could the next decade bring? Could this deal really reverse or at least halt Google’s ever-growing dominance and provide a viable alternative for SEO marketers?
Microsoft CEO Steve Ballmer predicted it would lead to “better value for consumers” and Carol Bartz, his Yahoo counterpart, said: “Advertisers will benefit from scale and enjoy greater ease of use and efficiencies working with a single platform and sales team for premium advertisers.”
Of course, it’s to be expected that Microsoft and Yahoo have hailed the deal.
More significant are the words of approval from respected media figures outside the two camps.
Thoughts from the outside
Sir Martin Sorrell, chief executive of one of the world’s largest communications services group WPP, said: “This is extremely encouraging and introduces more balance into the search and display markets.
“It is good for our clients and our agencies and for regulators.”
Meanwhile, organic search specialist Vanessa Fox noted on Search Engine Land that SEO marketers wanting to know how their pages will be indexed and ranked on the new Yahoo essentially just need to check how they perform on Bing.
She added: “This might not be a bad thing for site owners, as over the last year, Yahoo’s search quality seems to have been declining.”
The Microsoft-Yahoo timetable
One potential sticking point, of course, is the timetable.
Microsoft is hopeful that regulatory approval will be granted in early 2010 and has estimated full implementation of the agreement will take a further 24 months. That’s more than 2½ years from start to finish.
In the meantime, all eyes will be on Google to see how it responds to the linkup between its two main search rivals.