As widely expected, Microsoft and Yahoo! announced a deal (very early) this morning, a 10 year agreement to have Bing power Yahoo! searches, with Yahoo! controlling ad sales. Last night we asked a few questions, and by digging down a bit we found some answers this morning. Like most of the tech writers, Wall Street is favoring Microsoft in this deal (at this writing nearly halfway into today’s stock market session, MSFT is up a bit but YHOO is down around 10% – you can click on the ticker symbols in our Sane Bull stock market widget for more information). However, while the deal will increase market share in terms of what the advertiser sees, at first look this deal does little to promote “the decision engine”.
According to remarks made by Yahoo! CEO Carol Bartz in an early morning conference call, and also wording in the Microsoft press release, Yahoo! search will be “powered by Bing”, and that labeling will only appear on search results pages. From the press release:
Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.
…and then Bartz’s remarks, as reported by Danny Sullivan at Search Engine Land:
Search will still be prominently Yahoo branded. Bottom of results will be “powered by Bing.”
So while Bing will power Yahoo! search, and offer one seamless set of (larger) numbers for advertisers to spend on, this deal doesn’t do much, apparently, to further the Bing brand. It won’t necessarily promote the “decision engine” (which is largely if not completely about UI), or promote Bing’s heavy focus on the four verticals: shopping, trip planning, health, and local. Of course the details about how Bing will appear on Yahoo! are (very) murky at this point. Bing has had good reaction to its UI changes and features like the Price Predictor, and it’s unclear why Yahoo! would want to replace that with something that didn’t work as well, so we may see Yahoo! search become quite a bit more Bing-like in the next months. However the wording of the announcement makes it clear that Bing will power Yahoo! search results, but not replace them per se, and that it won’t necessarily be the Bing experience within Yahoo!.
Ballmer and Bartz did talk about possibilities surrounding mobile search, which while not exclusive, is part of the deal (again, via SEL):
Bartz: We have option of using MSFT technology for the mobile experience. It’s not exclusive as on the PC. If somewhere down the road we want to switch we could.We’re very interested in doubling down on the mobile experience. Having an integrated search is important.
Ballmer: We don’t know all the scenarios involving mobile search. This gives Yahoo flexibility on the mobile side. It won’t make sense to do a whole separate crawl of the internet for mobile search.
Bartz: What we’re very interested in doubling down on the mobile experience to integrate search as part of that, to integrate our content.
In addition, some details did emerge this morning on the Yahoo! search technology. Microsoft “will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms”. So Microsoft will have access to Yahoo! search technologies, with Yahoo! holding title to them. Bartz indicated that some Yahoo! search technicians would probably move to Microsoft, some would move elsewhere in the company, and there would be “some redundancies”, although not in the immediate future.