Yahoo, Microsoft still await partnership rollout in Asia

Western governments yesterday granted the internet behemoths approval to enter into a decade-long search and revenue-share deal.

A Microsoft spokeswoman said both Microsoft and Yahoo are still in talks with the Korean, Taiwanese and Japanese governments to also secure the necessary clearance in the key markets, and planning for its roll out in Asia-Pacific will go forward once the appropriate approval is granted.

“The terms of the agreement required clearance by US and European regulators before it could commence. However, Microsoft and Yahoo! continue to work with regulators in Korea, Taiwan and Japan to ensure that they have all relevant information necessary to evaluate the transaction before the deal commences in those specific jurisdictions,” Yahoo said in a statement. “It will take approximately 24 months for Yahoo to fully transition to Microsoft’s search and advertising platform globally.”

The company could not release further market-specific information about the deal and could not comment on how the deal would effect operations in China and Japan, where Yahoo is engaged in joint ventures.

In the region, multiple sources from both Microsoft and Yahoo said that, although the companies are still in the process of sorting out their operations, planning is in the works without a definitive timeline.

According to the companies’ joint statement, Yahoo and Microsoft will immediately begin working with advertising partners to prepare for the transition. The process will first start with reintegrating the algorithmic search and is slated to be operational in the United States by the end of 2010.

“The companies also hope to make significant progress transitioning U.S. advertisers and publishers prior to the 2010 holiday season, but may wait until 2011 if they determine that the transition will be more effective after the holiday season. All global customers and partners are expected to be transitioned by early 2012,” the release continued.

The news comes seven months after the companies first voiced their intention to partner.

At the time, the companies said Microsoft’s Bing would power Yahoo search, and Yahoo would exclusively handle the worldwide sales for both companies' largest search advertisers.

The companies contended that the deal would leverage their global positions, solidifying Yahoo’s position as a display leader and giving Bing the scale to compete with Google more effectively.

The agreement would further give Microsoft access to Yahoo’s search technologies for 10 years, and allow it to integrate Yahoo’s capabilities into its search platforms. In exchange, Yahoo is poised to receive 88 per cent of revenues generated by search on its sites for the first five years.

According to reports, the US Department of Justice ruled that the deal is not monopolistic and will not harm netizens, publishers or advertisers.

Throughout the process, advertising and media holding companies including Publicis Groupe, WPP, Interpublic and Omnicom voiced their support for the partnership.

According to reports citing the companies’ SEC filings on the deal, Microsoft is also poised to hire 400 Yahoo employees. Regional sources could not comment on the departments these employees will be from or how many in the region would be effected.

“It is a great opportunity for employees within Yahoo and our advertisers, and we’re excited to be going forward with this arrangement,” a regional Yahoo spokesman said. “This is the beginning of the conversations between the two companies, and this is the point of integration and that’s why it’s exciting.”