Microsoft and Yahoo take on Google with search deal

Microsoft’s Bing will now power Yahoo search while Yahoo will become the exclusive worldwide relationship sales force for both companies' search advertisers.

Microsoft said the agreement would provide Microsoft’s search engine, Bing, with the scale necessary to compete with Google more effectively, attracting more users and advertisers, which in turn will lead to more relevant ads and search results.

Microsoft will acquire an exclusive 10-year licence to Yahoo’s core search technologies, and Microsoft will have the ability to integrate Yahoo search technologies into its existing web search platforms. Yahoo will receive 88 per cent of revenues generated by search on its sites for the first five years.

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.

Each company will maintain its own separate display advertising business and sales force.