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A Yahoo! sign is seen in New York's
Times Square November 18, 2008.(Xinhua/Reuters
File Photo)
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BEIJING, July 30 -- Microsoft Corp has finally
roped Yahoo Inc. into an Internet search partnership, capping a convoluted
pursuit that dragged on for years and finally setting the stage for them to make
a joint assault against the dominance of Google Inc.
The 10-year deal announced yesterday gives Microsoft
access to the Internet's second-largest search engine audience, adding a
potentially potent weapon to the software maker's Internet arsenal as it tries
to better confront Google, the leader in online search and advertising.
Microsoft didn't have to give Yahoo an upfront
payment to make it happen, as many Yahoo investors had hoped.
Google tried to stop Yahoo from falling into
Microsoft's camp.
Last year, it formed its own proposed search
advertising deal with Yahoo, only to be forced to retreat from that alliance
after US antitrust officials threatened to sue.
The extended reach will allow Microsoft to introduce
its recently upgraded search engine, called Bing, to more people.
The Redmond, Washington-based software maker believes
Bing is just as good, if not better, than Google's search engine.
Liu Ning, an analyst with the research firm BDA
China, said the partnership between Microsoft and Yahoo will have little impact
on China's search engine market.
"Because neither company has significant business in
China, the impact of the deal is near zero," Liu said.
He said Yahoo has almost given up the Chinese market
through its deal with domestic e-commerce giant Alibaba and Microsoft's online
business in "China is even smaller than that of Yahoo."
Taking over the search responsibilities on Yahoo's
highly trafficked site gives Microsoft a better chance to convert Web surfers
who had been using Google by force of habit.
"Microsoft and Yahoo know there's so much more that
search could be," said Microsoft Chief Executive Steve Ballmer.
"This agreement gives us the
scale and resources to create the future of search."
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A sign hangs at the Microsoft booth at the annual
Consumer Electronics Show (CES) in Las Vegas, Nevada in this file image
from January 9, 2009. Microsoft and Yahoo inked a 10-year web search deal,
announced July 29, 2009, to challenge market leader Google, but stopped
short of combining their display advertising businesses.(Xinhua/Reuters Photo)
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In return for turning over the keys for its search
engine to Bing and promoting it, Yahoo will get to keep 88 percent of the
revenue from all search ad sales on its site for the first five years of the
deal and will have the right to sell ads on some Microsoft sites.
Yahoo estimated that the deal will boost its annual
operating profit by $500 million and save the Sunnyvale, California-based
company about $275 million on capital expenditures a year because it won't have
to invest in its own search technology.
An unspecified number of Yahoo engineers will lose
their jobs as the company scales back, Yahoo Chief Executive Carol Bartz told
analysts yesterday.
"But the deal isn't expected to close until early
next year, and then it could take another two years before all the users, and
the industry, and I believe it establishes the foundation for a new era of
Internet innovation and development," Bartz said Wednesday.
Under the agreement, Yahoo will have limited access
to the data on users' searches, which yield insights that can be used to pick
out ads more likely to pique a person's interest.
The value of that information is why Microsoft wants
to process more search requests.
(Source: China Daily/Agencies)
