Yahoo/Microsoft Deal

Yahoo and MS announced a partnership towards 'search'. Below are some useful pointers:

-The partnership is to provide an alternative to Google for Search. At the moment, Google has 80% market share.

-The deal leverages the strengths of MS and Yahoo, while allowing the companies to invest in other areas and can lead to innovation.

-Microsoft will now power Yahoo search, while Yahoo will become the exclusive worldwide relationship sales force for both companies' premium search advertisers

-The details on the Mobile Search is not crystal clear.

-The PC part is exclusive, whereas mobile is not—Yahoo can partner with other vendors in the future if it chooses

-Forrester’s U.S. Interactive marketing forecast shows that search spend is forecast to continue to grow at around 15 percent a year, to more than $30 billion in 2014 in the U.S. alone, which explains why Microsoft is so keen to play in this market.

-With the Yahoo partnership, Microsoft will increase its mobile search presence significantly, while Google is still dominating the market

-This is strategic attack from Microsoft to defend its core businesses, as Google is targeting its future growth from the software market( Chrome ! Android ! )

-Microsoft will acquire an exclusive 10-year license to Yahoo's core search technologies, and Microsoft will have the ability to integrate Yahoo search technologies into its existing Web search platforms

-Microsoft will guarantee Yahoo’s owned-and-operated revenue per search in each country for the first 18 months following initial implementation in that country

-At full implementation, expected to occur within two years following regulatory approval, Yahoo estimates that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million