Microsoft Plus Yahoo vs. Google, So It Begins
The Microsoft and Yahoo marriage has been blessed by antitrust regulators both in Europe and over the pond, giving the two companies green light to implement their anti-Google search alliance. On the morning of February 18th, 2010, the U.S. Department of Justice and the European Antitrust Commission have wrapped up their reviews of the Microsoft-Yahoo search agreement. With the alliance between the two giants cleared without restrictions, the duo will now move to implement the deal.
“Although we are just at the beginning of this process, we have reached an exciting milestone,” said Microsoft Chief Executive Officer Steve Ballmer. “I believe that together, Microsoft and Yahoo! will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”
Microsoft claims that the search agreement was announced in late July 2009, but the company has been flirting publicly with Yahoo for a total of over two years, but there’s no way of telling just how much time had Ballmer actually spent on this deal ahead of the start of 2008. The debut of February 2008, brought with it an unsolicited offer of $44.6 billion from Microsoft, which at the time was trying to acquire Yahoo. Making sure that the deal fell through was Yahoo co-founder Jerry Yang, then occupying the position of CEO.
It was only after Yahoo Chief Executive Officer Carol Bartz took the helm of the Internet giant that the discussions with Microsoft were rekindled, leading to the search alliance made public in 2009, which received green light from antitrust regulators this week.
“We appreciate the thorough reviews conducted by the DOJ and the Commission and we welcome the thoughtful decisions reached by each agency. We also commend the collaborative efforts the regulators undertook to understand the search advertising market. Likewise, we are grateful for the efforts of regulators in Australia, Brazil and Canada who previously cleared the agreement, as well as those regulators we continue to work with in Korea, Taiwan and Japan,” noted Brad Smith, Microsoft senior vice president and general counsel.
Microsoft and Yahoo plan to start implementing the deal in the coming days. Essentially, the search alliance involved the transitioning of Yahoo’s algorithmic and paid search platforms to Microsoft. Yahoo users will start searching the Internet with Bing, instead of Yahoo’s own search engine, while Yahoo will still control relationship sales force for the duo’s premium search advertisers worldwide.
According to the January 2010 U.S. Search Engine Rankings provided by comScore, Google accounted for no less than 65.4% of the search market, while Yahoo owned 17.0% and Bing 11.3%. With their two search shares combined, Yahoo and Bing will be up to 28% of the search market, still less than Google. But the gap between the Mountain View-search giant and other players on the search market is even steeper on non-US markets.
“We believe this agreement promotes choice, value and innovation for consumers, advertisers and publishers. Today, one company dominates more than 75 percent of the search advertising market in the U.S. and more than 90 percent of the market in Europe. We’re hopeful that this agreement is a first step for a viable competitor to emerge,” Smith added. “As we said when we announced the deal last July, the agreement required regulatory clearance in the U.S. and Europe before it could close. Now that we’ve received those approvals, we will begin the work of implementing the agreement. And we will continue to work with regulators in other relevant jurisdictions to ensure they have the information they need to evaluate the deal before it takes effect in those specific markets.”
