Yahoo, Microsoft Sign Search Pact [Microsoft Gets To Run Yahoo Search, Yahoo To Run Ads On Bing]

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Yahoo! and Microsoft have gotten approval from the US Department of Justice and European Union’s trade commissions that allow them to divide and share their services. Microsoft will now “run” Yahoo’s search tech while Yahoo will gain access to Microsoft’s search advertisers. It’s definitely an uncommon deal but could be successful for both.

Microsoft tried to buy Yahoo unsuccessfully in 2008, but that hasn’t stopped the two from agreeing to merge (somewhat) their search efforts. Bing and Yahoo will remain separate websites, but they are compiling their efforts. Microsoft will provide the back-end engineering and search algorithms that provides the search results and provides relevant query data to the advertisers.

Yahoo’s ad sales team, on the other hand, will gain access to Microsoft’s already sold ad contracts. Yahoo will now be responsible for selling ads on both Bing  and Yahoo. However, each of the companies will have control over the “look and feel” of each site.

Microsoft is getting access to some of Yahoo’s proprietary search technologies and some Yahoo employees are being “traded” to Microsoft in order to work on the new back-end of Yahoo Search.

It’s a bit odd when Yahoo (a search company that predates Google) is having its search provided by Microsoft (a company who had no decent search engine until last year). Still, the writing has been on the wall. With only 7% of the search market, Yahoo has become much more a web portal in recent years.

What’s Google’s take on all this? According to CNET’s search blog, “Google will definitely watch the implementation stage to see how the combined partnership affects the search experience and advertiser interest.”