Yahoo Inc and Microsoft announced on Friday that they have finalized the details of their planned Internet search and advertising partnership.
The companies hope to implement the deal next year with the approval of anti-trust regulators.
“Yahoo and Microsoft welcome the broad support the deal has received from key players in the advertising industry and remain hopeful that the closing of the transaction can occur in early 2010,” the companies said in a joint statement.
“Microsoft and Yahoo believe that this deal will create a sustainable and more compelling alternative in search that can provide consumers, advertisers and publishers real choice, better value and more innovation,” the statement said.
Yahoo and Microsoft had originally planned to complete their agreement by Oct. 27 but extended talks “given the complex nature of the transaction.”
PACT PLAN
The plan to sign a 10-year Web search and advertising pact was unveiled in July and promises to set the stage for a soft offensive by Yahoo-Micro against Google, the king of the lucrative search and advertising market.
Under the no-cash deal, Yahoo will use Microsoft’s new Bing search engine on its own sites while Yahoo will provide the exclusive global sales force for premium search advertisers.
Forrester analyst Rebecca Jennings was among those who said the agreement, under which Yahoo! will use Microsoft’s new Bing search engine and handle Web ad sales, would boost both companies.
“This deal should help convince even the most stubborn budget-holder that spreading their money outside of Google would be beneficial,” she said.
“This will create a more viable second-string player in all markets, giving interactive marketers a significant, credible alternative/additional outlet for their search spend,” Jennings said.
‘NERVOUS’
Analyst Rob Enderle of Silicon Valley’s Enderle Group agreed, saying that many advertisers were “nervous” about Google’s dominance and “would just as soon not do business with Google.”
Bing increased its share of the US search market in October, edging up half-a-point to nearly 10 percent, according to data from online tracking firm comScore. Google also added half-a-point in October to reach 65.4 percent. Yahoo saw its market share decline 0.8 percent in October to 18.0 percent.
Last month’s figures have yet to be released.
Enderle said a combined Microsoft-Yahoo “gives them enough of a share to be a player.”
“At eight percent you’re not really a player. You step up to around 30 percent and suddenly you’re an alternative,” he said.
Chief executive Carol Bartz said the deal will allow Yahoo to “focus on the things we do best -- being the center of people’s lives online with properties like our homepage, mail, finance, news, sports, entertainment, mobile, etc.”
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