Yahoo, Microsoft Search Deal and Global Search Marketplace

Finally Yahoo and Microsoft have established an agreement for 10 years that will improve the Web search experience for users and advertisers with regulatory approval and both trust that will be in place by early 2010. Microsoft has unveiled a press release through Microsoft, Yahoo! Change Search Landscape.

SEOs and Internet Marketers should need to give close attention about the deal of changing search landscape by Yahoo and Microsoft. The impact of this web search experience has summarized by many world renowned Search Engine Optimization expert earlier times. The brief of this deal is shared by this Web Surfer -

Yahoo! and Microsoft announced an agreement that will improve the Web search experience for users and advertisers, and deliver sustained innovation to the industry. In simple terms, Microsoft will now power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.

For Web users and advertisers, this deal will accelerate the pace and breadth of innovation by combining both companies’ complementary strengths and search platforms into a market competitor with the scale to fuel sustained development in search and search advertising. Users will find what they care about faster and with more personal relevance. Microsoft’s competitive search platforms will lead to more value for advertisers, better results for web publishers, and increased innovation and efficiency across the Internet.

The key terms of the agreement are as follows:

• 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% of search revenue generated on Yahoo!’s O&O sites during the first 5 years of the agreement.
• 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.
• 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.
  

But actually the majority of global search market share is captured by Google according to many leading digital media measurement companies and the join ventured companies didn’t spell out Google in the official announcements except for a link on the Yahoo blog post, but which other company “dominates more than 70 percent of all search”?

The reality is that Google controls the large majority of search market share on one hand and even more of the advertising dollars that flow through search, on the other hand. Clearly, Microsoft desperately wants a piece of this cake, and it won’t settle for a small one.

Search Engine Market Share by Hitslink



According to Nielsen reports May 2009 data for the Top U.S. Search Providers. Total U.S. searches increased 20.3 percent year-over-year, from 7.8 billion in May 2008 to 9.4 billion in May 2009.



According to comScore, Inc. monthly comScore qSearch analysis of the U.S. search marketplace. In June 2009, Americans conducted more than 14 billion core searches, with Google Sites accounting for 65.0 percent search market share. Microsoft Sites grabbed 8.4 percent market share, a 0.4 percentage point gain versus May, after introducing its new search engine, Bing.



So what you think about the global search market share and the agreement?
Will the agreement change the percentage of present search share?
How Google takes this search deal?

Time will say everything about the Web search experience for users and advertisers.

References:

1. Microsoft, Yahoo! Change Search Landscape - http://www.microsoft.com/Presspass/press/2009/jul09/07-29release.mspx
2. Nielsen Announces May U.S. Search Share Rankings, With Total Searches Increasing 20 Percent Year-Over-Year - http://en-us.nielsen.com/main/news/news_releases/2009/june/video_data_may_2009
3. comScore Releases June 2009 U.S. Search Engine Rankings - http://www.comscore.com/Press_Events/Press_Releases/2009/7/comScore_Releases_June_2009_U.S._Search_Engine_Rankings
4. Top 10 Things the Microsoft/Yahoo! Deal Changes for SEO - http://www.seomoz.org/blog/top-10-things-the-microsoftyahoo-deal-change-for-seo
5. Microsoft-Yahoo Search Deal: The Most Important Facts (And Some Opinion) - http://www.techcrunch.com/2009/07/29/microsoft-yahoo-search-deal-the-most-important-facts-and-some-opinion/
6. Live Blogging The MSFT - YHOO Search Deal Press Conference - http://searchengineland.com/live-blogging-the-microsoft-yahoo-search-press-conference-23202