Under the 10-year agreement, Yahoo will use Microsoft’s Bing search engine on its Web sites, the companies said today in a statement. Yahoo, in turn, will sell ads that appear next to those Web-search results and the companies will share the revenue.
Microsoft, the world’s largest software maker, is seeking more users for Bing, which has about an eighth of Google’s market share in the U.S., according to research firm ComScore Inc. Yahoo spurned Microsoft’s offer to buy it outright last year for as much as $47.5 billion. Microsoft Chief Executive Officer Steve Ballmer has said an ad deal would help both companies, and Yahoo CEO Carol Bartz said in May that talks were under way.
“This agreement comes with boatloads of value for Yahoo,” Bartz said in the statement. In a May speech she used the word “boatloads” to describe the amount of money she would require to sell Yahoo’s search business.
The agreement may disappoint some investors, because it doesn’t include an upfront payment to Yahoo, said Jeff Lindsay, an analyst at Sanford C Bernstein & Co. in New York.
“Everyone was counting on an upfront payment,” Lindsay said.
Source :- Bloomberg.com
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This is such a huge upset of online advertising on the internet.. I think it is because the Google profits is about 65% share while Yahoo and Microsoft together just hold about 28 percent on the market.. Maybe there's some real competition for Google with the collaboration between the competition. But I think Google can cope of it...
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