Microhoo Deal Given Thumbs Up to Proceed

Microsoft and Yahoo announced today that their planned Search Alliance has been given the go-ahead by the U.S. Department of Justice and the European Commission without any restrictions.

The exact implementation is yet to be announced, but will involve Yahoo shifting their organic and paid search operations to Microsoft. Yahoo will then display primary search results from Bing and enhance them with Yahoo content.

From Yahoo’s official press release:

“Implementation of the deal is expected to begin in the coming days and will involve transitioning Yahoo!’s algorithmic and paid search platforms to Microsoft, with Yahoo! becoming the exclusive relationship sales force for both companies’ premium search advertisers globally. Once the transition is completed, the companies’ unified search marketplace will deliver improved innovation for consumers, better volume and efficiency for advertisers and better monetization opportunities for web publishers through a platform that contains a larger pool of search queries.”

Advertising for both companies will be managed by Microsoft’s adCenter platform (meaning the closure of Yahoo Search Marketing) and prices for all search ads will be set by AdCenter’s automated auction process.

According to a memo sent to all Yahoo advertisers today:

  • Yahoo Search Marketing advertisers will log into one place – Microsoft’s adCenter – to manage campaigns, for greater efficiency and a better ROI.
  • Yahoo is hoping to transition advertisers and partners in the U.S. prior to October 2010, but may wait until 2011 for efficiency reasons.
  • Advertisers will reach users on Yahoo! and Microsoft sites as well as other premium partner sites, with a single buy on adCenter.
  • Yahoo will give Search Marketing advertisers 3 months warning of any changes to take place.

The two search giants have created a web site dedicated to the partnership and Yahoo has implemented a Transition Center for advertisers.

What does it mean for the search industry? To use a silly dinosaur analogy, (because who doesn’t like those?), it means that Bing the Triceratops and Yahoo the Brontosaurus have just combined to become an aggressive Tyrannosaurus Rex that’s going on a hunt for the Google Gigantosaurus.

Should be quite a spectacle.

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The Microhoo Jaw Dropper

jaw dropIf you’re a blogger in the search industry, you’re probably still reeling from the jaw-dropping news that broke on Saturday: Microsoft has made a 45 billion bid to purchase Yahoo.

So if this rather ambitious acquisition proceeds, what exactly will this mean for the search industry? There is a lot of speculation right now that it will never happen, but let’s just imagine it did.

For starters, I’m sure MS would scrap their existing PPC offering AdCenter and incorporate the better known Yahoo Search Marketing system under their own brand. They would also likely scrap Yahoo’s Directory and combine the Yahoo search data with their own Live Search results to create a super search engine of sorts, running on their own algorithm.

The new Microhoo could be a definite threat to Google. Just how the acquisition could or should proceed is perhaps the most interesting part of the whole deal. There are bound to be market monopoly issues at stake. You can bet both the Federal Trade Commission and the Federal Communications Commission are watching the unfolding saga very closely.

Meanwhile reactions from bloggers in the search industry are fun to watch.

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