'MicroHoo' Deal 'Could Help Ad Industry'

Ad industry execs including Sir Martin Sorrell have welcomed yesterday's news of a deal between Microsoft and Yahoo! to work together on search and advertising.

The agreement is expected to be a revenue-sharing deal with no up-front payment, but will still be subject to scrutiny - likely to be considerable - by the US Department of Justice. A search deal between Yahoo! and Google was scrapped last November while undergoing the same investigation with heavy lobbying from Microsoft: Google will be expected to do the same now.

If and when approval is granted, the deal is expected to take two years to implement, the firms said, and to last for ten years [2022? It's hard to believe it won't be obsolete by then].

Microsoft failed in its unsolicited $47.5bn bid for Yahoo in February 2008. According to comScore, a combination of the two for search purposes would give them around 30% share of global searches, to Google's 65%.

Marketers say the competition for Google should be healthy, leading to innovation and possibly reduced ad prices. According to Sorrell, the tie-in should be 'good for our clients and our agencies and for regulators'. He added: 'This is extremely encouraging and introduces more balance into the search and display markets.'

Under the agreement, Microsoft's new Bing engine will power search across Yahoo!'s sites, while Yahoo! will sell search advertising space for both companies. Other parts of the two businesses including display ads will remain unchanged.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.