After over a year of failed talks, takeover offers, proposals and god knows what else, Microsoft and Yahoo are finally doing business together in a deal to be formally announced Wednesday.
Kara Swisher broke the news, with AdAge following up with the details. The deal involves Yahoo abandoning its search platform in favor of Bing, with Microsoft ceding ad sales to Yahoo in return. As Michael Learmonth writes:
The deal will take Yahoo out of the search-technology business so it can focus on media, marketing services and sales. Microsoft, especially if it can cede search sales duties to Yahoo, becomes more of a technology and infrastructure company, its disciplines better aligned with its strengths. (It would still, however, have a massive global display-ad sales business.)
The deal will face some hurdles, with the Department of Justice likely to look at the competition aspects, but the chances of it being blocked aren't great.
The big win out of the deal is for Microsoft's Bing search engine. The upstart search platform that has been making headway in the search engine market will soon power search on Yahoo, a company with a long and rich online history. According to some reports, Bing's market share could end up as high as 30%, but more likely somewhere in the 10-20% range (comScore claims Google has a 65% share currently, while others say it's over 70%.) The Bing engineers in Redmond will be sharing more than a few toasts on the news, and credit where it's due.
There's no word yet on how the deal will affect Yahoo and Microsoft properties outside of the United States, if at all. Given the media partnerships in countries such as Australia, I'm betting that the deal will be US only, but we'll find out in the next day or two.