The European Union and the U.S. Department of Justice just cleared the proposed search deal between Microsoft and Yahoo. Under the terms of this deal, Microsoft’s Bing will soon replace Yahoo’s own search engine on Yahoo’s sites, while Microsoft will get an exclusive 10-year license to Yahoo’s search technology. Yahoo will receive 88% of all the revenues from search ads on its site for the first five years of the agreement and handle the sales for Microsoft’s and Yahoo’s premium search advertising inventory.
Sponsor
What Does this Mean for Consumers?
First of all, it’s important to note that while Yahoo will incorporate Bing’s search results, the company has no plans to scrap any of the auxiliary search products that currently surround Yahoo’s search results. This means that Yahoo will continue to show results from it’s own news product on its search results pages, for example. Yahoo’s Search Pad and Search Scan apps that allow users to filter searches will also remain on the search results pages.
According to Yahoo’s own announcement, this deal also means that the company can now focus on providing even more additional services around search, without having to focus on maintaining its own search engine.
Nothing New for Yahoo
For Yahoo, using somebody else’s search technology isn’t really anything new. Before launching its own search product, Yahoo had a partnership with Google that lasted from 2002 to 2004.
Overall, Bing offers better search results than Yahoo’s own search engine. Besides better search results, Yahoo’s users probably won’t notice any major differences once Yahoo begins to use Bing. According to Yahoo’s statement, this implementation will begin in the next few days, though the exact date for the transition isn’t clear yet.
More Competition for Google
Bing, which is already growing at a steady clip will not become and even more important rival for Google’s search engine. While anybody would be hard-pressed to argue that Google isn’t innovating fast enough, this renewed competition from Bing will surely put some pressure on Google to innovate even faster.
In addition, this deal also makes Microsoft and bigger player in the search engine advertising business, a field that Google can currently dominate because of the sheer size of its market share.
And What About Developers?
Yahoo also just posted some information about what it plans to do with its developer tools now that this deal has been cleared. The overall message in Yahoo’s announcement to developers, though, is that the company doesn’t really know what it will do yet.
For BOSS, Yahoo and Microsoft are considering a fee-based structure, the future of SearchMonkey is unclear (“we’re working hard to determine which path provides the best value for site owners and end users”) and with regards to Yahoo’s Site Explorer, Yahoo is also still considering its options.
Click here to read the full text of the joint Microsoft/Yahoo press release.