What MS and Yahoo get out of the deal; And what advertisers and you could possibly get

Source: CNET News

Its time that everybody's been thinking why Microsoft and Yahoo have come up together with the deal between the two companies getting merged. Some have come up with the view that its an attempt to thwart off Google from its pre-dominant position in search market with MS doing the trick with its Bing Search Engine that was very well received from the consumer according to a report.

Here's an insight into what piece of pie does everyone get out of this delicacy:
Yahoo:
Yahoo is paying a 12 percent share for the outsourced search engine Bing from Microsoft, as MS pays Yahoo 88 per cent of the search revenue generated to it. Yahoo gets a guaranteed stream of search revenue for the next 18 months.
Plus, it gets to sell all the ads that are displayed on both Yahoo and Microsoft sites.
The new Yahoo CEO Tim Morse says that the company estimated that it will save $200 million in capital expenditures and see and overall benefit of $500 million in operating income.

What Yahoo gets low on the deal is the right to choose its destiny. The Search market of Yahoo is now in the hands of MS.

Microsoft:
The part of the good news for Microsoft is the ability to have a far more search market than it would have dreamt of acquiring. MS has almost tripled its search market with the merger. What's more is that all the Yahoo's tried-and-tested search tech and semantics is now available to MS.
And what's rumored is that MS would have to pay "boatloads of money" to get all this what it has got just in a merger rather than an acquisition of the Search Giant.
The part that's prickling is the relationship of MS from its advertisers that are now the "property" of Yahoo.

Google:
But what does Google get out of this? Does it get anything? Yes, Time. This deal as is said will take months, (if not years!) to complete and would be quite a deal to break.
Google Representatives likely called up their major clients to inform them of the uncertainty of this integration process and that they might be better of with a more stable operation.

Just what bitter truth for Google is that it cannot have the old British "Divide-and-Rule" strategy. Google was better off letting Yahoo and MS play like small kids trying to beat the "Daddy" of Search and compete between themselves as well. Now what happens? The two have a far more chance of making serious competition against Google when they're together as one. [The power of Unity!]
Google has more to live up to now!!!

Advertisers:
Advertisers now get a credible second option for their ad-spending as against the only other giant, Google, just about assuming that ad-spending ever becomes trendy again amidst the economic backdrop. They're also in store for a renewed pitch on the benefits of Internet display advertising, which probably still doesn't resonate on Madison Avenue but may one day start to make sense for the Internet advertiser.

But still, the relationships between advertisers and the two companies will grow more complicated as those used to working with certain representatives transfer their business to new faces. These may be resolved, but still are annoying.

Consumers:
For now, the only thing that consumers would get out of this is,

Yahoo Search Results:
Blah Blah Blah Blah
http://Blah Blah.co,m
"Powered by Bing"

What consumers lose out of this is the decrease in the available choices to them. This is not usually seen as good, but time will tell what's better.


Better still, Microsoft's got more market now so much so that it can force Google into playing defense while Yahoo gets to focus on more of its business.

Until then, its just not obvious!

Microsoft, Yahoo join forces to challenge Google

Source: SiliconIndia News

Tech giants Microsoft and Yahoo reached a long-awaited partnership on Wednesday in a bid to challenge Google, which holds a 65 percent market share in online search. The two companies have plenty of challenges now, but the ground rules have been set: Yahoo's job is to be an online hub, and Microsoft's job is to out-Google Google

Under the 10-year deal, Microsoft would provide Yahoo with the Search Engine Technology with its Bing Search while Yahoo would handle the Advertising part from its huge traffic.

In exchange, Microsoft will pay its partner Yahoo with 88% of the search revenues generated on yahoo sites.

According to Microsoft chief executive Steve Ballmer, the deal will allow Microsoft to "create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company".

A Yahoo-Microsoft partnership would mean about 28 percent of Internet searches would be performed on their combined platform, according to figures from ratings firm ComScore.

That would still be less than half of the about 65 percent market share of Google Inc., which has long dominated the search space.

Last year, Microsoft attempted to buy Yahoo for more than $45 billion, an unsolicited bid Yahoo rejected, but the Redmond, Washington-based software giant has long had Yahoo's search business at the top of its wish list, and the two had reportedly been in discussions for months.

Yahoo estimated the deal would add $500 million to its annual operating profit, as well as saving it around $275 million in expenses related to developing and maintaining its own search technology.

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