Microsoft and Yahoo agreement

Microsoft and Yahoo entered into a 10-year search-and-advertising agreement that effectively takes the latter out of the search business and finally makes Microsoft a search contender. What does this mean for the search field? And what does this mean for SEO?

To get the answer to these questions, we need to take a closer look at the deal itself. It seems as if it’s being covered nearly everywhere, but Search Engine Land and SEOMoz provide especially good information on the details and tease out the significance. Much of my summary will be taken from these two sources.

Basically, the agreement grants Microsoft a 10-year license to Yahoo’s core search technologies. The software giant can, if it chooses, integrate the venerable search engine’s technologies into its own. Meanwhile, Yahoo has agreed to, in effect, get out of the search engine business. Once the deal is finalized (and it is subject to regulatory approval), every time you search on Yahoo, it will be Microsoft’s search engine – now named Bing, and formerly known as Live and MSN – that actually delivers the results.

Yahoo will still handle the user interface for its own search engine, so it should still look like you’re searching on Yahoo. Or it will when the deal closes, which is expected to happen some time in early 2010.

But wait, there’s more. Both companies are also integrating their paid search technologies. They expect to complete this step about a year after integrating their free search technologies, or some time in 2011 for the major countries. The full transition, when all results showing up on Yahoo (free and paid) will be powered by Microsoft, should be completed by early 2012.

There’s a certain poetic irony to this story, as Vanessa Fox observed. Writing for Search Engine Land, she pointed out that in 2002, Microsoft didn’t have its own search index; it used Inktomi instead. But Yahoo bought Inktomi, so Microsoft started building its own index to keep from having their search supplied to them by a competitor. Seven years later, Yahoo is now ditching the index they bought – to use the index it forced Microsoft to build because of that purchase.

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