Microsoft-Yahoo search pact appears to be a win-win (if smaller) deal

Microsoft's 18-month courtship of Yahoo has reportedly culminated in an ad and technology pact that appears to be smaller than many analysts anticipated, but still gives the software giant the 30 percent search market share it craves.Various reports have Microsoft and Yahoo announcing a deal within the next 24 hours.

Microsoft's 18-month courtship of Yahoo has reportedly culminated in an ad and technology pact that appears to be smaller than many analysts anticipated, but still gives the software giant the 30 percent search market share it craves.

Various reports have Microsoft and Yahoo announcing a deal within the next 24 hours. Kara Swisher notes:

  • No upfront payment for Yahoo;
  • Microsoft's search technology will power Yahoo's search;
  • It's unclear whether the Bing brand will land at Yahoo;
  • Yahoo will still sell search ads on its site and Bing, but Microsoft's AdCenter will be the technology powering those sales.

The deal does appear to be structured in a way that saves Yahoo money, allows it to participate in search advertising upside and grab search market share. Indeed, Ad Age reports that Yahoo will drive ad sales in the deal.

Yahoo CEO Carol Bartz noted that search needs scale and seemed to imply that a deal with Microsoft wouldn't be so bad after all. Bartz, who even said she liked Bing, has also maintained that Yahoo wanted to control its customer data.

In the end, it appears both sides got what they wanted. Yahoo maintains sales control and the customer relationship. Microsoft's gets search market share as well as a big win for its Adcenter platform.

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