Here’s a quick run-down of the Microsoft / Yahoo deal.
- Microsoft will have access to Yahoo’s search technologies and integrate them with their own
- Microsoft’s Bing will handle both the paid search and algorithmic search for Yahoo
- Yahoo will be in charge of selling premium search ads for both itself and Bing
- Though Bing is providing the search platform, Yahoo will “own” the user experience for all Yahoo properties
- Self serve ads for both companies will be done using Microsoft’s AdCenter platform
- Yahoo will be compensated by Microsoft based on traffic generated through Yahoo’s sites and their affiliate sites
Even with combined forces Microsoft and Yahoo have their work cut out for them. Google currently controls over 70% of search traffic and has done so for quite some time.
Today’s stock market indicates that investors are a little wary of the deal. Despite the double-team threat Google’s shares only went down 1%, Mircosoft’s went up 1.5%, and Yahoo’s shares dropped by 7.8%. Those numbers aren’t entirely encouraging for Yahoo which has been hurting financially since 2008 when they were hit with hefty impairment and restructuring charges.
But Yahoo now expects to make an extra $500 million a year in operating income with Bing’s help.