Will MicroHoo Raise Eyebrows On The Hill?
More than eight months after abandoning its planned advertising partnership with Google amid intense scrutiny from Capitol Hill and the Justice Department, Yahoo is joining forces with Microsoft. The companies announced an agreement Wednesday that they believe will improve the Web search experience for users and advertisers. Under the plan, which they expect to close in early 2010, Microsoft would power Yahoo search while Yahoo will become the exclusive worldwide relationship sales force for both companies' premium search advertisers, according to a press release.
The agreement does not cover each company's Web properties and products, e-mail, instant messaging, display advertising or any other aspect of the companies' businesses. "In those areas, the companies will continue to compete vigorously," they stated. The transaction will be subject to regulatory review and the agreement entered into Wednesday anticipates that the parties will enter into more detailed definitive arrangements prior to closing. The pair acknowledged that their deal will "be closely reviewed by the industry and government regulators" and they welcome questions.
Under the 10-year agreement, Microsoft will acquire an exclusive license to Yahoo's core search technologies, and Microsoft will have the ability to integrate Yahoo search technologies into its existing Web search platforms. Microsoft's new search engine Bing will be the exclusive algorithmic search and paid search platform for Yahoo sites. "Providing a viable alternative to advertisers, this deal will combine Yahoo and Microsoft search marketplaces so that advertisers no longer have to rely on one company that dominates more than 70 percent of all search," the firms said in an indirect jab at Google.
The Google-Yahoo deal fell apart last November after the Justice Department informed them that it would file an antitrust lawsuit to block arrangement. The agency said, if enacted, the combination would have accounted for 90 percent or more of each relevant market and would likely harm competition in the Internet search advertising and search syndication fields. Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., House Energy and Commerce ranking member Joe Barton and others repeatedly expressed their apprehension over the deal and it remains to be seen whether they will raise questions about the new project. Barton's main beef with the Google-Yahoo pairing pertained to privacy and pricing.
Read more about the Microsoft-Yahoo partnership at ChoiceValueInnovation.com, a Web site launched by both companies to explain the arrangement.
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