Google vs Microsoft:Microsoft Inks Deal With Yahoo
Microsoft has finally inked the deal with Yahoo to take on the might of Google. The deal is interesting if not intriguing. Yahoo had resisted the moves of Microsoft to buy it out. Then waited for Microsoft to launch its own search engine Bing and contrary to public declarations from Microsoft, held its own against Microsoft. So is the present deal better than the $44 Billion that Microsoft initially offered?
Microsoft’s global presence is only 4% as on today, about as much as Yahoo. If Microsoft wants to be a serious contender to Google it has to have a global presence where Google holds 90% of the traffic. So, what does the deal offer Yahoo?
- The Agreement is for a period of 10 yrs where Microsoft will have access to Yahoo’s search competencies and technologies.
- Although the search Algorithm for both will be Bing only, the display Ad business and sales force will be separately maintained by Yahoo.
- The search service access for both the companies will be Microsoft AdCentre.
- Yahoo will be compensated for the revenue it generates on its net work.
- For the first 5 years Yahoo will be paid 88% of the revenue generated on its net work.
- Through this deal Yahoo expects to get $500 million in operating income and Yahoo will also save $200 million in expenditure. Yahoo also expects its Annual operating income will increase by $275 million.
