Microsoft and Yahoo! have received approval from both the U.S. Department of Justice and the European Commission for their search deal announced in July 2009. The 10-year agreement deal between Microsoft and Yahoo! to combine the companies’ search platforms brings together the number 2 and 3 players in search together, providing advertisers a combined audience of 577 million searchers worldwide. Bing will serve as both the organic and paid search platform for both Yahoo and Microsoft. Yahoo will manage the exclusive worldwide salesforce for both companies’ paid search services. Display media will be maintained separately.
According to their press release, the transition will begin in the “coming days” and the companies have set a goal of completing that effort by the end of 2010.
The key terms of the agreement are as follows:
- Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites and Yahoo! will continue to use its technology and data in enhancing display advertising technology.
- Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.
- Each company will maintain its own separate display advertising business and sales force.
- Bing 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.
- Bing 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.
Below is a video from Microsoft CEO Steve Ballmer discussing about the search agreement with Yahoo!
Likewise video from Yahoo! CEO Carol Bartz discussing about the agreement
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