Microsoft & Yahoo Take On Google

The 10-year agreement between Microsoft & Yahoo was a rumor for sometime, it has become a reality.

The search engine Bing, owned by Microsoft, will now power Yahoo. In return, Yahoo will be better placed to compete with Google for a share of the online advertising revenue stream.

Last year, Yahoo turned down a similar deal with Microsoft, the departure of Yahoo’s CEO made revisiting the proposal possible. In recent years, Yahoo’s market shares were dangerously slipping. The deal with Microsoft is probably the best outcome for the company in order to stay relevant.

Today, head of Microsoft Steve Ballmer commented on the 10-year deal: “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.”

For Yahoo, chief executive Carol Bartz said: “This agreement comes with boatloads of value for Yahoo, our users, and the industry. And I believe it establishes a new era of Internet innovation and development.”

Yahoo stated that the agreement would increase their operating annual income by $ 500 million. The deal is projected to give Microsoft & Yahoo a combined market share of  30 percent. However, Google will remain the biggest player, by far, with a market share of 65 percent.