The two companies have been dancing around each other for the last 18 months, ever since Yahoo rejected a $45billion take over bid by Microsoft.
Since then of course Yahoo have had a change of leader with Carol Bartz stepping in to fill the shoes of departing founder Jerry Yang.
The last 18 months has also been filled by the ever expanding influence of Google, coupled with little or no innovation from Yahoo.
Under the terms of the deal, Microsoft’s new search engine ‘Bing’ will become the default search engine on Yahoo under a revenue-sharing deal.
For the first couple of years, Yahoo would keep 100% of the revenue generated, plus a further 10% – all according to tech blog AllThingsD. In the third year, Yahoo’s share would drop to 90%
The deal would give MicroHoo / YahSoft a combined market share of 30% of the US search ad market. This compares to Google’s 65%.
The US Department of Justice may well stand in the way of any deal, possibly seeing it as a collapse of competition. Last year a search ad deal between Yahoo and Google was blocked by the regulators. .
All this is probably a bigger deal in the US than it is in the UK, were Google’s market share is nearer 90%.
What does this mean if you’re trying to drive visitors to your website? Well it’s quite interesting. If you’re using sponsored search advertising (PPC), then it means that Microsoft’s AdCenter will be used more and more. That brought a collective groan in our office since it’s hardly the easiest thing to use.
When it comes to Search Engine Optimisation (SEO), things may get more complicated. At the moment all SEO optimisation efforts are made to boost a website up the results pages on Google, since that is where the vast majority of traffic comes from. If a second powerful player emerges, website owners will have to optimise for both. And since they have different ways of categorising and indexing web pages, that could be complicated. You don’t want to have to have two websites – one that you boost up Google, and the other that you boost up Bing!
What do you think of the deal? Will it have an influence on your website building? Leave us a comment below.