The pulsating race for being the numero uno search engine continues among the web giants. In order to emerge as a frontrunner in the web world, new business strategies and techniques are planned by the key players. Deals, acquisitions and buyouts figure in the list of plans as the Internet evolves as one of the most powerful global mediums.
Microsoft and Yahoo has finally tied their on and off relationship into a new 10-year deal to compete with Google.Microsoft made a $47.5 billion hostile offer during the spring of the year 2008, to buy Yahoo. But Microsoft abandoned the offer after a firm four-month battle. The two companies announced a more limited deal on July 29, 2009 and a partnership in Internet search and advertising. The deal was mainly intended to create a stronger rival to the industry powerhouse Google.
Finally on 4th of December, 2009 two Internet magnets Yahoo and Microsoft announced the big deal that would transform their “search platforms into a market competitor.” Yahoo Search will be powered by Microsoft while Yahoo gets a revenue sharing agreement.
One question can arise after going through the whole story that how will Wall Street react? While the shareholders and investors of Microsoft had a mildly positive reaction to the deal, Yahoo shares sunk by billions of dollars. It received a big hit in annual revenues, 88% of the search-generated ad revenues from its own sites for the first 5 years of the 10-year deal, much higher than industry standards.
Still, we don’t outline any doubt with the assessment that the two companies are probably better off together than apart. Both companies have an ambition to make the partnership work in the long-term with a 10 year search deal where revenue will be shared. Surely, Google will keep its fingers crossed or it can look for a new deal to outdo Microsoft and Yahoo.
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