Can Microhoo Truly Compete with Google?

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image from JVManna

After a persistent stream of rumors about a deal between Microsoft and Yahoo, the news was officially confirmed this morning with a press release. Although the press release is quite lengthy, some of the key notes from it include:

-The term of the agreement is 10 years

- Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers

-Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process

-Full implementation (expected to occur within 24 months following regulatory approval)

Although you can learn a whole lot more about this deal by reading the full press release, these are the highlights that are most relevant to our discussion.

The first thing that is important to note is that this deal is not going to cause any sort of change overnight. Pending regulatory approval, both companies concede that it could take two years for them both to fully mesh with each other, and given the size of both of these companies, it’s not hard to see a full integration taking significantly longer than that projection.

As Internet marketers, the most notable information from this press release has to do with how the two companies will now handle their advertising. As they stated, Yahoo will become the unified sales force for premium search advertising. If the two companies can actually integrate enough to make this work, this would allow them to create the type of scale necessary to compete with Google. Also, it will be interesting to see how much more intense the battle becomes between AdWords and AdCenter now that they are the only two advertising platforms in the spotlight.

If you just can’t get enough of this story, I recommend reading this insightful post from Jason Calacanis on the matter: Yahoo committed seppuku today.


On a side note, if you are interested in hearing an interview with one of Google’s top executives (Vice President of Search Products and User Experience), be sure to check out the Digg Dialogg tonight with Marissa Mayer. In case you aren’t familiar with Digg’s Dialogg, it allows the Digg community to submit questions for the individual being interviewed, as well as voting on questions submitted by others. The top questions are then asked during the interview (which in the case of this one, will be conducted by Kevin Rose).

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