The Yahoo! and Microsoft Search Alliance is on the horizon once more and it’s important to know the ins and outs of what’s actually going to happen. Firstly it’s not a merger – the 2 companies are not joining forces in all respects – it’s an agreement between the 2 search divisions of each respective company.

The alliance has been running for a while now in North America and a few hiccups initially stalled the process in the UK and Europe. With these now set to be resolved it’s looking likely that Q2 (2012) is a good date to look out for.

The deal has been struck for 10 years and the official line is as below:  

“The Yahoo! and Microsoft Search Alliance combines the complementary strengths of Yahoo! and Microsoft to create a competitive choice in search with the scale to fuel sustained development. Both companies aim to ultimately enable searchers to find relevant results faster, and provide more value for advertisers and better results for web publishers.”

Essentially the Yahoo! advertiser interface (Panama) will become defunct, to be replaced by Microsoft’s adCenter platform. The two sites will still operate as individual search engines, only the technology powering both in terms of results will be Microsoft’s (Bing).

Each company will still generate its own content on each site and still develop tools and experiences to try and attract users in their own way (a little bit like having a Sony laptop and a Dell laptop – they both look and feel different on the outside – however both are powered by an Intel chip).

So there will be elements of how both companies work together and also areas that they both compete – once again the official line on this is as follows:

How Yahoo! and Microsoft will work together:

• Search ad inventory from Yahoo!, Microsoft and their respective partners will be combined into a new unified search marketplace.
• Microsoft will acquire an exclusive 10-year license to certain Yahoo! search technologies.
• Microsoft will manage the technology platforms that deliver the algorithmic (powered by Bing) and paid (powered by adCenter) search results.
• Full implementation of the terms of the search alliance is expected to occur within 24 months following regulatory clearance.
• Yahoo!’s Sales team will exclusively support high volume advertisers, SEO and SEM agencies, and resellers and their clients, and Microsoft will support self-service advertisers. In addition, Microsoft adCenter will be the platform for all search campaigns.

How Yahoo! and Microsoft will compete:

• The Yahoo! and Microsoft Search Alliance does not include each company's display advertising, web properties and products, email, instant messaging, or any other aspect of the companies' businesses.
• Each company will maintain its own separate display advertising business and sales force.
• Yahoo! and Microsoft will innovate their own consumer search experiences to compete for search users and search queries.
• Yahoo! and Microsoft will service their respective publishers, also known as affiliate search partners.
• Yahoo! will continue to syndicate its existing search affiliate partnerships.

So to summarise this is just for search – it’s just the technology that’s changing that powers the search results.

Advantages: With one of the platforms disappearing – you now only have two logins to worry about rather than 3 which will save you some time. This also only means one point of contact which will be the Yahoo! team. One buy will mean greater market share - added to this the algorithm of adCenter favours traffic that converts as opposed to Yahoo! which favours relevance which should mean advertisers see greater returns

Disadvantages: You will no longer be able to split out results from both engines. The Search Alliance means that by buying, you appear on both and can’t just appear on one or the other, so for smaller advertisers this may now be a more expensive proposition. The flip side to this of course is that the crossover of traffic is likely to be quite high so that in reality there may not be that much more difference.

In terms of transition, Yahoo! and Microsoft are currently working hard behind the scenes to make this process as smooth as possible. Both engines will give plenty of warning and make recommendations to agencies as to next steps. There is still value to be had with your individual accounts right up until transition - however if you aren’t working with either engine it’s important to speak to us to talk about this as a potential option.

For any further information – please speak to your Account manager at Periscopix or head here

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