Search Alliance by Yahoo and Microsoft

Microsoft (Nasdaq “MSFT”) and Yahoo! (Nasdaq
“YHOO”) announced today that they have received clearance for their
search agreement, without restrictions, from both the U.S. Department
of Justice and the European Commission, and will now turn their
attention to beginning the process of implementing the deal.

of the deal is expected to begin in the coming days and will involve
transitioning Yahoo!’s algorithmic and paid search platforms to
Microsoft, with Yahoo! becoming the exclusive relationship sales force
for both companies’ premium search advertisers globally. Once the
transition is completed, the companies’ unified search marketplace will
deliver improved innovation for consumers, better volume and efficiency
for advertisers and better monetization opportunities for web
publishers through a platform that contains a larger pool of search

“This breakthrough search alliance
means Yahoo! can focus even more on our own innovative search
experience,” said Yahoo! Chief Executive Officer Carol Bartz. “Yahoo!
gets to do what we do best: combine our science and technology with
compelling content to build personally relevant online experiences for
our users and customers.”

Microsoft CEO Steve
Ballmer concurred with Bartz’s assessment. “Although we are just at the
beginning of this process, we have reached an exciting milestone,”
Ballmer said. “I believe that together, Microsoft and Yahoo! will
promote more choice, better value and greater innovation to our
customers as well as to advertisers and publishers.”

Consumer Search Experience

terms of the agreement, which was announced in late July 2009,
Microsoft will provide Yahoo! with the same search result listings
available through Bing, and Yahoo! will innovate around those listings
by integrating rich Yahoo! content, enhanced listings with conveniently
organized information about key topics, and tools to tailor the
experience for Yahoo! users.

Yahoo! will
focus on providing a compelling and innovative search experience that
allows people to find and explore the things, people and sites that
matter most to them. While Microsoft will provide the underlying
platform, both companies will continue to create different, compelling
and evolving experiences, competing for audience, engagement and

Transition Timeline

and Microsoft will work with advertisers, publishers and developers on
a customized plan designed to make the transition as efficient and
seamless as possible. Both companies will begin working closely with
most partners well in advance of their planned transition to the
Microsoft platform and will communicate important information to
partners about the transition periodically via phone, e-mail, webinars.

companies will begin the transition of algorithmic search and have set
a goal of completing that effort in at least the United States by the
end of 2010. The companies also hope to make significant progress
transitioning U.S. advertisers and publishers prior to the 2010 holiday
season, but may wait until 2011 if they determine that the transition
will be more effective after the holiday season. All global customers
and partners are expected to be transitioned by early 2012.

Customer Relationships

the transition is in place, Yahoo! and Microsoft will each represent
and provide customer support to different advertiser segments. Yahoo!’s
sales team will exclusively represent and support high volume
advertisers, SEO and SEM agencies, and resellers and their clients.
Microsoft will represent and support self-service advertisers.

Regulatory Summary

the transaction previously was cleared by regulators in Australia,
Brazil and Canada, the terms of the agreement required clearance by
U.S. and European regulators before it could commence. Meanwhile,
Microsoft and Yahoo! continue to work with regulators in Korea, Taiwan,
and Japan to ensure that they have all relevant information necessary
to evaluate the transaction before the deal commences in those specific


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