Microsoft and Yahoo! sign landmark deal

29 Jul 2009

Yahoo! and Microsoft have announced their much anticipated agreement to work together on internet search and advertising, in a move to challenge Google’s dominance in this area.

Microsoft CEO, Steve Ballmer, said the 10-year partnership would provide choice, better value, and more search innovation for consumers, advertisers and publishers.

Under the deal, Microsoft will power Yahoo! search while the latter will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.

According to the two companies, the deal will accelerate innovation by combining their “complementary strengths and search platforms into a market competitor with the scale to fuel sustained development in search and search advertising. Users will find what they care about faster and with more personal relevance. Microsoft’s competitive search platforms will lead to more value for advertisers, better results for web publishers, and increased innovation and efficiency across the internet.”

“This agreement comes with boatloads of value for Yahoo!, our users, and the industry. And I believe it establishes the foundation for a new era of Internet innovation and development,” said Yahoo! CEO Carol Bartz. “Users will continue to experience search as a vital part of their Yahoo! experiences and will enjoy increased innovation thanks to the scale and resources this deal provides. Advertisers will also benefit from scale and enjoy greater ease of use and efficiencies working with a single platform and sales team for premium advertisers. Finally, this deal will help us increase our investments in priority areas in winning audience properties, display advertising capabilities, and mobile experiences.”

Ballmer said the agreement would provide his company’s search engine, Bing, the scale necessary to more effectively compete, attracting more users and advertisers, which in turn will lead to more relevant ads and search results.

“Through this agreement with Yahoo!, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company,” he said. “Success in search requires both innovation and scale.  This agreement with Yahoo! will provide the scale we need to deliver even more rapid advances in relevancy and usefulness.  Microsoft and Yahoo! know there’s so much more that search could be.  This agreement gives us the scale and resources to create the future of search.”

By Grainne Rothery