Let me begin this blog by saying that it is not my intent to mention Microsoft in every blog. This blog was created in order to keep a tab on the latest and greatest on the technology front.
Having stated this, I now present to you (surprisingly) Microsoft, in the headlines again today after penning a monster deal with the lesser known player in the search party game, Yahoo.
Front page on the NY Times website this morning was the headline announcing the Microsoft-Yahoo pact. The agreement differs from last year’s deal, where Microsoft bid $47.5 million to buy Yahoo. That hostile offer was ultimately rejected by Yahoo, and its collapse and the uncertain aftermath for the Web company led to a management change and the replacement of its co-founder Jerry Yang by Carol Bartz, an outsider who is now Yahoo’s chief executive the Times article said.
Under the pact, Microsoft will provide the underlying search technology on Yahoo’s popular Web sites. The deal provides a lift for Microsoft’s recent overhaul of its search engine, renamed Bing, which has won praise and favorable reviews, after years of falling further and further behind Google with updates to Windows Live, and Windows 7.
For Yahoo, the move furthers the strategy under Ms. Bartz to focus the company on its strengths as a producer of Web media sites, from finance to sports, as a marketer and a leader in on-line display advertising that accompanies published Web sites. The terms of the 10-year agreement call for Microsoft to license Yahoo’s search technologies, and Yahoo will initially receive a lucrative 88 percent of search-generated ad revenue.
Aside from the interior logistics of the deal, the merge is setting the stage for a showdown between megalith Google, who currently controls over 80% of the search engine market, and Microsoft/Yahoo who now co-own the remaining share.
The deal gives Microsoft a chance to show off its new search engine prodigy child Bing. Despite good reviews and a genius marketing, Bing has not attracted many big time advertisers simply because Google dominates the majority of the search engine traffic. By tripling its usage through the alliance with Yahoo, Microsoft has a better shot at luring more advertisers, which, in turn, helps the company increase the revenue it earns from searches.
As with most Microsoft initiatives, this one can only be analyzed in time. Taking on Google is like trying to build a snow man in Mexico, but Microsoft’s newfound drive to conquer every market they can makes me think back to an adage coined (after translation) by Kevin Garnett after winning an NBA championship, “Anything is Possible”.
Go get em’ Microhoo
Joe Carretta
I have always been a big Microsoft supporter (ironic I use a mac now - although I won't say I don't love it) and I'm a fan of Bing. I hope this merger will unfold nicely for Microsoft and will help drive traffic and advertising to Bing. I've never really liked the messiness of Yahoo's site and their fragmented business plan. I think that they're one of those companies that are successful because they were one of the first big guys in the market and not because of innovative vision or top-notch steering from the executives. It's a good thing the overpriced hostile takeover last year didn't work out for Microsoft, and it'll be interesting to see if Yahoo is pulled in at all by Microsoft in terms of scope. Good post!
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