Microsoft and Yahoo rumoured to be finalising deal

Several reports have surfaced today indicating that a Microsoft and Yahoo! deal is "imminent".

24/7 Wall Street is reporting that under the terms of the agreement, Yahoo! will be paid $3 billion upfront and will get 110% of the revenue that its searches provide after traffic acquisition costs in each of the first two years. In the third year, that figure would go to 90%.

Top executives at Microsoft–including SVP of the Online Audience Business Group Yusuf Mehdi and others have reportedly flown to Silicon Valley to iron out the final details of the deal. It's expected that Microsoft will pay Yahoo cash upfront to take over its search advertising business.

Microsoft has been in talks with Yahoo for nearly 2 years, during which time Microsoft has evaluated a takeover bid, seen Yahoo reply to it's ultimatums and nearly miss out on a deal when Yahoo attempted to partner with Google. The Yahoo-Google partnership failed due to regulatory concerns.

According to figures from ComScore, in June Google held 65% of the search market in the US, with Yahoo at 19.6% and Microsoft on only 8.4%. If the Microsoft Yahoo deal takes place then this will bring Microsoft up to nearly 30% market share in the US, tripling its current current share.

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I do hope Microsoft and Yahoo come to an amazing agreement. I want Google to loose some share. Seriously. I think Bing is really good, and needs to gain the share it deserves

It's to do with Yahoo Search, nothing to do with the rest of the Yahoo brand. Microsoft would never kill of that brand. Even if Microsoft do own all of Yahoo, but keep Yahoo, it doesn't mean you can't use Yahoo Mail

Um... Yahoo gets 110% of the revenue that it's searches provides? And how does this benefit Microsoft? This just seems to be benefiting the struggling Yahoo more than anyone. Doesn't quite make sense to me...

Yeah, it does sound kinda kooky. Even if it goes down to 90% in its 3rd year, Microsoft is going to sustain some bad losses giving Yahoo! extra cash for that 10%, and helping Yahoo! compete with them in other areas....

_dandy_ said,
What was the offer that Yahoo rejected last year, 33 billions or something?

$44.6 billion, but that was for all of Yahoo!, not just their search...

Mikeyx11 said,
$44.6 billion, but that was for all of Yahoo!, not just their search...


I (vaguely) remember the 44 billion figure, but I thought that was their asking price?

And without their search, what is Yahoo really worth?

_dandy_ said,
I (vaguely) remember the 44 billion figure, but I thought that was their asking price?

And without their search, what is Yahoo really worth?

Agreed. Yahoo has shut down some of their services since they were struggling so much. I don't know what more they have worth acquiring other than their search... Maybe Microsoft came to that realization as well?

Like to see Delicious.com in the hands of Microsoft. There are so many things that could've been done for the Delicious Firefox toolbar but not under Yahoo's management.

McoreD said,
Like to see Delicious.com in the hands of Microsoft. There are so many things that could've been done for the Delicious Firefox toolbar but not under Yahoo's management.

Yahoo! don't have a browser, but Microsoft do, so wouldn't Microsoft be more interested in NOT improving it, and making a really good one for IE? Unless they tie advertising into it. And, as far as I know, Microsoft are only buying Yahoo! search, not all of Yahoo!, so I'm pretty sure delicious will still be in Yahoo!'s control.

Great. Time to abandon my decade old Yahoo! account. I'm sure many users will do the same thing if Yahoo! gets in the hands of MS.

Why? Yahoo Mail sucks and there aren't many better services through Yahoo... BT gives it free with it's broadband being the only reason I have an account. Useless mail account.

Yahoo mail doesn't suck, have it for years no complains. When MS was offering 1MB with their Hotmail, Yahoo offered something like 150MB with POP access... Why do you say it sucks?
There are many cool services in Yahoo, try their gaming services for instance. The best chess portal around the web.

I have both a Yahoo and Hotmail account from days old. Before Hotmail was a Microsoft property.

One thing that bothers me about Hotmail, is they close your account unless you keep checking in on it. Yahoo does not. That makes Yahoo a better throwaway account for me. It is always available when I need it, without having to re-activate it. I don't lose any old emails (should I ever need to go back to one, that is).

My pick: Yahoo over Hotmail.

Lechio said,
Great. Time to abandon my decade old Yahoo! account. I'm sure many users will do the same thing if Yahoo! gets in the hands of MS.

lol. What does your Yahoo! account have anything to do with Yahoo! search?

Mikeyx11 said,
lol. What does your Yahoo! account have anything to do with Yahoo! search?

Yahoo evolves around their search engine. If Microsoft takes over you can bet that a lot will change for the other services. If it does I'll just leave. Last thing I want is to be receiving ads for the latest "Windows 7 Ultra Cool Version Yahoo Limited Edition" on my mailbox...

Google will benefit from this deal at the first place. I don't care about microsoft or yahoo search engine but please microsoft don't take Yahoo Mail from me

Jugalator said,
Yahoo seems to be a sinking ship though, according to HitsLink.
http://img142.imageshack.us/img142/8711/go...d2009071712.png

Maybe the idea is to redirect Yahoo searches to Bing, as the Yahoo search is obviously not doing too well? Not that I'm sure how Yahoo users will react to that. Will they prefer Google over Bing? In that case, that could lose them at an even higher pace.


Except that Bing *already* has supplanted Yahoo in the search wars (per an earlier news item here at Neowin).

There's also the possibility of a Yahoo-branded version of the Bing engine (or even Yahoo-branded-but-Bing-powered search-engine appliances for intranets and extranets, similar to Google's own search-engine-appliances for intranets/extranets).

This is more a case of Yahoo finally reading the writing on the wall and cashing out while they can.

I didn't post the Yahoo vs Bing stats from HitsLink above, because what I really wanted to show was how Yahoo was doing (Google was there too, but just because it happened to be the column in between). Anyway, according to HitsLink, Bing had ~5% market share in June 2009, mostly taken from MSN Search and Live Search, but seemingly a few fractions of a percent from Google and Yahoo.

BUT... This wasn't about Bing's market share -- I was really talking of Yahoo's and how they were doing. Not comparing search engines.

As long as they still keep Bing and maybe even phase out the Yahoo! brand (re-brand it to Bing), then I'll be happy

I love both Google and Microsoft and never really cared about Yahoo! lately, so the battle now is going to be super-interesting! And it's already started with the Chrome OS talks. Keep it up!

Well, handling re-branding properly, especially with Bing, and the high profile Windows 7 has (also the better reviews apps like IE8 have had) it isn't a bad time. MS's standing is currently higher than it has been in years and they will have a positive reflection on Yahoo which generally has a poor perception of late.

MS could save them and increase their share if done right. I wonder how it will affect Yahoo partners like BT?

kInG aLeXo said,
I don't think this will be a good move for Microsoft...

This does seem strange, Microsoft just released Bing, and it seems to be doing ok. What will they do, maintain two engines??? move Bing to Yahoo?? Slowely rebrand yahoo search to bing???

If you read the nytimes article, yahoo actually has a lot of number 1s, number 1 sports site, finance site, news site, etc....

I would think that it will be like the rest of Microsoft stories in the future.

Work with the company, get foot in door, buy them out, or simply learn what you can about the business - then run their own more efficiently. This isn't anything new or unexpected. The word in the market was circling this blending.

MS ought to sort it quick as it was reported on bSkyb News that Google has made increased advertising profits.

Dayum, I wish I had thought of Google and Yahoo, I would be mega rich.

Thinking of something isn't going to make you any money, you have to go out there and actually do the hard work. Google and Yahoo weren't new or revolutionary, Google was just a better search engine, and Yahoo provided loads of services under one roof, like AOL but for the internet.

cakesy said,
...like AOL but for the internet.

Like AOL but for the internet?? lol

I'm guessing you made a genuine mistake there so I'll give you the benefit of the doubt...

Mikeyx11 said,
Like AOL but for the internet?? lol

I'm guessing you made a genuine mistake there so I'll give you the benefit of the doubt...

I'm pretty sure he meant for the online masses not a crappy paid subscription service, and AOL for the most part was an ISP w/their own software

FoxieFoxie said,
LOL, after 3y, yahoo search market will be 5% lower and once ms gets 100% of search revenue, it will have like 2%

I wonder if MS is going to kill off Yahoo Search and force users to go to Bing?

oh, this is gonna be good if true ... lol, actually lately, i wouldn't mind Flickr being run by Microsoft, get some sliverlight in on that action (for video anyway)

artfuldodga said,
oh, this is gonna be good if true ... lol, actually lately, i wouldn't mind Flickr being run by Microsoft, get some sliverlight in on that action (for video anyway)

omg so true
i wish youtube would go silverlight but i think that is very unlikely