Microsoft-Yahoo Deal Excites Online Marketers

Jul 30th, 2009Comments Off on Microsoft-Yahoo Deal Excites Online Marketers

Advertisers are showing strong support for the Microsoft-Yahoo search deal, stating that it will be good for search marketing and good for the internet.  They expect the deal to take about 18 to 24 months to pass regulatory approval, and they’ll most likely have to defend this deal throughout the process.

Its a pretty good deal for both companies, with Microsoft fronting all the spend for Yahoo‘s infrastructure costs, saving Yahoo roughly $200 million per year.  In exchange, Microsoft will receive 12% of revenue for all search queries generated on its network, with Yahoo keeping the remaining 88%.  Microsoft CEO Steve Ballmer stated, “The 12% is going away, but all the costs are going away,” also noting that this is a minimum. “This is a floor, not a ceiling.”

According to ComScore, Google has roughly70% of search queries worldwide, compared to Yahoo‘s 9% and Microsoft’s 2%.  Google‘s share of search has become a key concern for marketers as they optimize their search budgets, and a major reason why many opposed Yahoo‘s attempted deal with Google last year.

Overall, marketers are stating that this is a positive move for the search industry.  It builds a more credible platform for Microsoft’s Bing, and will hopefully yied a better user experience as well as innovations in search.  Google as stated that they will not actively oppose the deal, which will most likely take the focus off their search dominance with regulators.

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