February 25, 2010 by Jenny Sanderson
A deal struck by two online superpowers, Microsoft and Yahoo has been cleared by European Union and US regulators. First announced in July 2009, clearance by regulators will see Microsoft allowed to buy Yahoo’s internet search and search advertisement business. This move comes as Microsoft attempt to increase their share in the Google dominated online search engine market.
The EU commission gave Microsoft their backing and stated that the deal “would not significantly impede effective competition”.
As it stands Microsoft and Yahoo share 10% of the online search market in the EU where as Google control around 90% of it. Just how big an effect this deal will have is set to be interesting as it is difficult to see how Microsoft will wrestle any of that 90% away from Google who have coined the internet search phrase “Google it”.
Chris Green, technology analyst at DMG Europe doesn’t provide a positive outlook for Microsoft:
“This deal gives Microsoft a bigger slice of the internet advertising business, but it is still miles and miles behind Google,” he said.
“Microsoft’s Bing is technically a very good search engine, but no-one uses it, and it doesn’t currently make a profit.
“The deal with Yahoo should turn it into a not-too-shabby and profitable world number two search engine. But still no Google.”
The ten year deal will see Microsoft’s Bing search engine used by the Yahoo site with the respective companies sharing the revenue. Yahoo will be providing the main advertisement sales team for Bing.
Now lets talk figures, under the term of the deal Microsoft will keep 12% of the search engine revenue garnered by Yahoo for the first five years of the agreement whilst paying Yahoo the remaining 88%.
The deal is set to be implemented in the next few days and comes off the back of other significant deals for both companies, Microsoft with Facebook and Yahoo with Nectar, it looks as though we may see some interesting collaborations in the online world this year.
Related posts:
- Microsoft could be working to undermine Yahoo-Google deal
- Bing gains a market share as Yahoo continues to flounder
- Californian Delegation comes to the aid of Google-Yahoo Deal
- Yahoo! and Bing gain more ground on Google
- Facebook and Microsoft shake hands on new deal
- Google Smashes Yahoo and Microsoft Again
