Blame Bing! – Microsoft search engine reason for Yahoo! deal
Microsoft and Yahoo have finally reached an agreement to collaborate and work together after two years of an on-off relationship more suited to a daytime soap opera than a business deal. So what changed Yahoo’s mind after years of being wooed by Microsoft? It seems Bing had a huge part to play.
Google dominates the Web search arena in the same way that Microsoft dominates the operating system market. Yahoo and Microsoft are the nearly-men, placing second and third in search. So why not team up, pool resources, and fight Google together?
As Sean recounts on TECH, this partnership/buyout scenario has been in the works for almost two years. Microsoft made clear its intention to acquire Yahoo but Yahoo stood firm in the face of generous offers and in the end both sides had to walk away.
The acquisition was no longer on, but talks about some sort of deal continued. It took a long time to arrive but that deal was announced this morning. Microsoft is now powering all search on Yahoo sites, while both companies will be selling advertising across all sites in an effort to make money. More importantly, the joined forces of Yahoo and Microsoft represent tougher competition to Google.
According to PC World, Bing was all-important to closing the deal. Microsoft unveiled its long-rumored new search engine earlier this year. It immediately started to do well and provided a true alternative to Google for the first time in a long time. Crucially, it also signaled Microsoft’s intent to Yahoo.
Neil MacDonald, vice president and analyst at Gartner Group said:
I credit Bing for being what tipped the deal finally over the edge. Microsoft has shown they can actually do something that has a chance of reversing the slide of both Yahoo and Microsoft against Google.
Not everyone loves Bing, and I personally still use Google nine times out of 10, but the re-branding and redesign was clearly noticed by Yahoo and its vocal CEO Carol Bartz. They obviously decided they faced a stark choice, fighting over a long-distant second place in the Search sector, or joining with their competition in order to put up a real fight.
The real fight can now begin.
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July 31st, 2009
“So why not team up, pool resources, and fight Google together?”
Because putting two coffins together won’t result in a resurrection.