Advanced Television

Microsoft and Yahoo search tie up

July 24, 2009

Microsoft and Yahoo have confirmed an agreement on a search and advertising deal. Microsoft will now power Yahoo search while Yahoo will become the exclusive worldwide relationship sales force for both companies' premium search. This will give the two companies a combined market share in the US search ad market of about 30%. Google would still be dominant with a share of around 65%.

For the first two years, Yahoo will keep 100 per cent of the revenue plus an additional 10 per cent, and 90 per cent in the third year. The aim is that, from the fourth year of the deal, Microsoft will become the number two player in the US search ad market. Microsoft CEO Steve Ballmer said the agreement will provide Microsoft'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.

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