The Microsoft-Yahoo deal: questions and answers

While Microsoft will control the search, Yahoo will control the ads -- some of them, anyway

Well, friends, sound the wedding bells: The longest-running courtship in the history of mankind has finally reached its climax. No July Fools' joke here -- Microsoft and Yahoo have agreed to tie the knot and form a search partnership. (Yes, that same partnership we've been hearing about since way back when.) The agreement will effectively send Yahoo's own search technology to the grave, giving that thing called Bing access to an extra 9 percent of the overall market.

But Yahoo itself isn't going away; in fact, from a user perspective, you might not even notice much difference. So what's the real deal with the deal, then? Here are some answers.

What will I see at Yahoo once the change takes place?

The same thing you see now, presumably. Yahoo will continue to brand its own search page and maintain its own identity. Microsoft's Bing system, however, will be doing the behind-the-scenes work on all the searches. It'll be considered the "exclusive algorithmic search and paid search platform" for all Yahoo-related sites.

So what's Yahoo's role in this partnership?

While Microsoft will control the search, Yahoo will control the ads -- some of them, anyway. The purple people will serve as the "exclusive worldwide relationship sales force" for "premium search advertisers" on both sites. Microsoft will continue to handle its own self-serve advertising and display advertising divisions.

Will both companies have access to all my info?

Microsoft and Yahoo have yet to release any specifics about policies, but their announcement does ensure that user privacy will be protected. The companies say they'll limit data-sharing to "the minimum [amount] necessary to operate and improve the combined search platform."

Will Hotmail, Yahoo Mail, and other Web services be combined?

Nope. The agreement only pertains to search; all other Web products will remain uncombined and unaffected.

What will this mean for Google?

The actual effect the Microsoft-Yahoo partnership could have on the search market is anyone's guess. Certainly, Google is in the companies' sights: Microsoft CEO Steve Ballmer describes the move as a way to provide "real consumer choice in a market currently dominated by a single company."

But could it have any real impact? Many are expressing their doubts. Some analysts, however, point out that if Microsoft and Yahoo have any chance of chipping away at Google's search market stronghold, this would be it.

"Separately, they have small fractions of Google's viewership, but together, with a well executed plan and solid cooperation, they have a shot of at least giving Google a run for its money," Gabriel Consulting Group analyst Dan Olds tells Computerworld.

All right, so will we finally be able to stop hearing about this now?

Probably not. On the plus side, the "will-they, won't-they" talk we've heard every other week for months should finally subside. Replacing it, however, will be a new line of "will they be able to" stories. The deal still has to be approved, and getting the A-OK could prove to be an uphill battle. Federal antitrust regulators will carefully scrutinize the agreement, sources quoted in The Wall Street Journal predict. The fact that Microsoft itself was a vocal opponent to a proposed deal between Google and Yahoo last year won't help matters.

I guess we'd better hold off on those wedding bells after all, then. The courtship may be over, but so far, this is only an engagement -- and there's no telling whether this loving couple will ever actually make it to the altar.

Connect with JR Raphael on Twitter (@jr_raphael) or via his Web site, jrstart.com.

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JR Raphael

PC World (US online)
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