Microsoft-Yahoo! deal is done; not as expected

The deal between Microsoft and Yahoo! is about to be announced, we've heard, but it's not a takeover: more an agreement. In IT Blogwatch, bloggers wonder what it will mean for searchers and advertisers.

Richi Jennings is your humble blogwatcher, who selected these bloggy morsels for your enjoyment. Not to mention lies told by the Chinese media...

Kara Swisher listens to her deep-throats again:

Multiple sources close to the situation said that the online search and advertising deal between Microsoft and Yahoo has been struck and will be announced within the next 24 hours. ... sources said it was a formality and that negotiations are complete on a deal that is less sweeping than originally conceived.

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Tthere will be no upfront payment to Yahoo, with the focus on a revenue share. ... Microsoft search technology will be used on Yahoo sites. ... Yahoo would still sell search ads on its sites and on Bing too, although Microsoft’s AdCenter advertising sales technology will be underneath. ... [So] the cost savings to Yahoo will be less than previously estimated, but it also solves its longstanding issues about control.
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Harry McCracken sounds a bit disappointed:

It’s not the merger that Microsoft wasted an immense amount of time on last year, and it’s apparently not as sweeping an arrangement as some folks thought the company would strike. But it’s still a big deal.

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For Yahoo, it’s yet another new search strategy. (Once upon a time, the company outsourced search to Google, then decided it was a core part of its business and built its own search engine; now it’s once again something it’s decided it can outsource.) For Microsoft, it helps scratch the must-take-on-Google itch that the company’s had trouble taking care of.
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Jordan Golson regulates his excitement:

The Department of Justice still needs to sign off on the deal, but executives of Microsoft and Yahoo are reportedly confident that will ultimately happen. The agreement will probably take months to finalize, but since Google currently claims 65 percent of U.S. searches, and Yahoo and Microsoft 19.6 and 8.4 percent, respectively, the sooner they can start to catch up, the better.
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What's Mark Sullivan wondering?

I’m wondering how such a partnership can achieve its end goal – to loosen Google's stranglehold on the highly lucrative internet search market. ... How will Bing win over substantial numbers of existing and potential Google search users?

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People often use the search engine that seems familiar to them. For most people today, that’s Google. ... I’ve seen no evidence that Bing’s algorythm searches the deeper, darker corners of the web any more thoroughly than Google’s. ... If Microsoft and/or Yahoo ever make a serious run at Google in the search business, it will take place over years, not months or quarters.
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Marshall Kirkpatrick looks forward:

There may be some very interesting consequences, both positive and negative, for innovation. ... Our guess is that it will be a net negative for forward-looking web users. ... The likely loss of Yahoo's own search work could be a major loss for the web at large.

There are some awesome projects underway at Yahoo! Search. ... [The] team has done more than almost any other major vendor in the market to support the open standards and semantic web work that we love so much. Yahoo's Build Your Own Search Service and Search Monkey markup are incredibly innovative. ... [And] why stay on top of the care and feeding of Delicious, which was helping feed Yahoo! Search results, if Yahoo! isn't doing its own search any more?
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So what's your take?

Get involved: leave a comment.

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Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and spam. A 24 year, cross-functional IT veteran, he is also an analyst at Ferris Research. You can follow him as @richi on Twitter or richij on FriendFeed, pretend to be Richi's friend on Facebook, or just use good old email: itblogwatch@richij.com.

Copyright © 2009 IDG Communications, Inc.

  
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