New Search Engine Platform, Bing – From a Yahoo-Microsoft Deal

By Adam Toren, on August 30th, 2009

It’s been a long time in the making, but the recent announcement by Microsoft that it has signed a cooperative agreement with Yahoo enabling Yahoo to use the former’s search engine platform is quite a watershed in the online information world.

There was a time when Yahoo was seen as a leader in the Internet search arena and when Google may have been seen as another upstart with one of those silly dot com era names.

A protracted period of latency coupled with some questionable business decisions led to virtual stagnation for Yahoo, at a time when Google really seized the initiative and started its growth towards total dominance in the arena.

Today, a clear majority of online information seekers choose to use the successful Google platform to search for solutions. Microsoft and Yahoo have languished in second and third places for some time. So far, they’ve been in negotiations for years, and just over a year ago, an attempt by Microsoft to buy out the other company fell through.

Under the new deal, Microsoft gets an exclusive 10 year license to access Yahoo’s search technologies and may integrate these into its existing platforms if needed. Yahoo may now utilize Microsoft’s new Bing search platform. Indeed, Bing has recently been rolled out in an aggressive marketing campaign and it is thought that this fresh face in the marketplace may have given Yahoo additional incentive to actually ink the deal.

Many analysts, including leading blogger Vincent Fernando, question the viability of the deal from Yahoo’s point of view. He estimates that Yahoo is moving down the value chain and if the company decides to completely adopt Bing as their own search, will be left with little of any tangibility to mark them as a viable ongoing concern.

The deal must pass regulatory approval before it can go forward. Microsoft appears particularly buoyant about the idea, with CEO Steve Ballmer stating that “it will enable us to innovate in search and provide consumers and advertisers with better transparency and choice.” As the deal will take up to two years to fully roll out, Google will have plenty of time to call on its own mighty resources to answer back any perceived challenge.

It is difficult to imagine even the combined “might” of Microsoft and Yahoo bringing a real fight to Google, given not only the latter’s dominance in the search world, but also increasingly stiff competition from the Mountain View-based company in the software and operating system environments, an area previously dominated by Microsoft.

As the deal is rolled out, expect to see innovations within Internet search technology and also see more competition in the world of search engine advertising and pay per click.

Adam Toren, Co-Founder of Young Entrepreneur, specializes in improving the profitability of under-performing businesses with a unique and ‘bottom line’ program. Adam, along with his brother, have started, bought and sold several companies over the past years. They currently own and operate a successful publishing company and several online companies.