Live Blogging The MSFT – YHOO Search Deal Press Conference

Microsoft and Yahoo are making it official: a deal about search. And to share the news, they’re gathering thousands of their closest friends to a press conference at 5:30am Pacific time today. Having been awake now for nearly 30 minutes, I’m just itching to get in and live blog this puppy. So come along for the ride. The fun begins shortly.

By the way, you can watch at home! A webcast is being offered by Yahoo here and Microsoft here.

Live blogging coverage starts shortly. Not soon enough, because the onhold music is killing me. It’s like the worst elevator music ever. No words. Blah. How about “We Are The Champions” or something inspiring! Eye Of The Tiger, maybe?

Microsoft CEO Steve Ballmer and Yahoo CEO Carol Bartz will be talking with us today.

Carol. This is a “great day for Yahoo” and this is a “game changer” and glad to finally talk about it.

Yahoo benefits. Yahoo great business. Half users come on daily business. Search is a formidable competitor for them. Working with another technology partner would help them scale [wow].

Want to invest to win audience, display and mobile. This agreement lets them get Microsoft search technology. Vision is to be center of people’s lives online.

Yahoo’s leader in many properties. The deal gives advertisers and extremely compelling story [consumers won't care].

Yahoo exclusive sales force for premium advertises. Microsoft does the self-serve.

Search will continue to be an integral part of Yahoo properties. Backend powered by Bing. Display ads not included and both companies will compete.

By combining scale they’ll do better for advertisers and consumers.

Search will still be prominently Yahoo branded. Bottom of results will be “powered by Bing.”

Publishers will find combination to have better reach and competitive rates than apart.

Consumers, advertisers and publishers will get choice if they’re worried about a single player. [who the hell are these publishers verses advertisers?]

Ballmer: Great news. Create more innovation for search. Consumer choice [you know, versus Google].

Making a strong number two player in search advertising [doesn't say who that is, it's now Microsoft of course, can't wait to talk to Ballmer about how it's going at our SMX West 2010 show where he's keynoting].

Win win for both companies [to me, win for Microsoft, ouch for Yahoo].

Shared vision, shared values, excited to see it flourish and come to live in coming months.

Carol again. Terms. 10 year exclusive license for Yahoo search tech on organic and paid. Each maintain own separate display ad tech and sales forces. Yahoo exclusively sells the premium folks on search. Yahoo will innovate and “own” search experience [just like AOL did, didn't help them].

88% split. Yahoo guarantees, stuff all in the release (see link at top of this story).

Operating income $500 million higher, save $250 million per year. [this is it? this is what you sell crown jewels for? what's the guarantee? where's the billions? OMG.].

Regulatory stuff to happen. Going to take up to 24 months to implement [that's like 20 dog years in internet time].

Time for questions.

Mark Mahaney of Citigroup. Miss part. Ballmer: search is more well known in automation in the ad selling process [versus display selling]. RPS gap [revenue per search] both are close but lag Google and some of that is scale [Yahoo didn't use that argument when it said the Google deal would help it]. More advertisers mean more bids, etc.

Yusef Squally [spelling prob wrong sorry]: Moved from deal that’s boatload of cash in Carol’s words to boatload of value. Why? And where do we go years 6-10. Carol: boatloads of value. Wanted a deal that floated well through P&L, not big cash upfront. As far as we’re concerned, boatload of cash is preserving our revenue line [you know, until the consumers all migrate to Bing which will continue to develop original search tech]. Ballmer: take current revenue mix Yahoo has, and Microsoft is guaranteeing it [still no friggin actual figures. what's the guaranteed amount?]

Adam Holt: Revenue to Microsoft? Couple hundreds of millions of costs over the first two years. Upsides really come as able to improve relevance of search product. Ads are part of relevance. Then improve monetization on Microsoft and Yahoo site. [and kill Yahoo as search player with Bing moving into second place, that'll help, of course :) ]

[Handing off coverage to Greg Sterling now....]

AdAge: Question about regulators and convincing “Washington to make this happen.”

Ballmer: We expect we’ll face some opposition from “the competitor” who won’t like this. We expect “the competitor to be aggressive.” We have a good case on how its good for consumers, advertisers and publishers. It’s been looked at extensively by counsel at both companies. Brad Smith (Microsoft): We expect to start the filing process in Washington DC next week. Google has 78% of market share of paid search.We don’t kno

Quesion about jobs and team redundancy (miss author):

Bartz: Yes there are many Yahoo search employees who will be asked to take jobs at Microsoft. There will also be search employees who we look to help us on the display side. And then unfortunately there will be some redundancy in Yahoo. This is a transition over the next two and half years. Yes there will be redundancies but that’s in the future.

Question about “part that search plays in service offerings to the consumer.”

Ballmer: The way deal was constructed — the most complex part of the discussion — it allows us to have the same ability to use search and innovate around search. Issues: what data get shared; what APIs and technology needs to be shared, etc. The big thing was to work through were the details on how these things worked.

Questioner follows up and calls MSFT “IBM.”

Bartz: Explains that Yahoo has the ability to use data

PaidContent asks about mobile and “platforms beyond the web.”

Bartz: We have option of using MSFT technology for the mobile experience. It’s not exclusive as on the PC. If somewhere down the road we want to switch we could.We’re very interested in doubling down on the mobile experience. Having an integrated search is important.

Ballmer: We don’t know all the scenarios involving mobile search. This gives Yahoo flexibility on the mobile side. It won’t make sense to do a whole separate crawl of the internet for mobile search.

Bartz: What we’re very interested in doubling down on the mobile experience to integrate search as part of that, to integrate our content.

[Greg hands back to Danny...]

Next question on sales

Ballmer: When sales people sell, you don’t know ?? details ?? when you sell a campaign … You’re buying the keyword in both environments. [this suggests that the Yahoo sales force can't sell yahoo & bing placement separately. Bartz made a comment suggesting that self-serve might be the same, you have to buy them both].

Question on using the Yahoo technology.

Ballmer: Licensed to integrate the code, build into Bing, integrate good technology from Yahoo [Microsoft has enough Yahoo engineers at this point who probably would love to get back to some of their "native" tools]. Burden on Microsoft to deliver the goods and enable Yahoo to be successful.

Bartz: Notes that when it comes to paid search, Panama is the provider in most international marketplaces for Microsoft already.

Question again on combining things.

Ballmer says he’ll let Bartz talk about UI innovation [she never gets to that, which is fine, because surveys find this is a second order feature to consumers. Ballmer talks as he's done before that the more paid ads you have, that helps search results, as you learn on what people click on [actually, you don't need ads for that, you just need lots of searchers period. And Bing should have enough already to do this type of refinement]

Bartz says often not enough focus on sales and marketing innovation [& why should there be? both adCenter and Panama talked about how innovative they were. advertisers didn't care -- they wanted traffic].

Question on why this deal is better than the one a year ago.

Bartz: Getting an upfront payment and low ongoing payments wasn’t interesting. Really trying to run a long term business to invest for our success and future [which is incredibly confusing. if Yahoo's in things for the long term, really "owning" search in terms of your own technology is long term thinking. it's where Yahoo came from -- a search engine before all else. it's still the leader over Microsoft in traffic. the reality, of course, is that it's hard to be a long term leader with Microsoft and Google keep stealing your employees].

Bartz: Yahoo needed to be focused. It has great content in audience properties, great mobile experiences, powered by technology microsoft has stepped up to. [i feel like i'm hearing AOL talking from years ago on how they'd innovate without having to own search. why's yahoo going to succeed here when they didn't nor can i think of any major portal that has, without their own search].

Question from … me! I asked what happens to other things search like at Yahoo? What powered Yahoo News? What happens to the Yahoo Directory? Is Delicious search? And what happens to Yahoo paid inclusion?

Bartz: We have full flexibility on what to do within our own sites. Paid inclusion, we’ll decide on that later.

Ballmer: Yahoo will be able to take full advantage our our search technology in its network. We wanted to give them flexibility.

Not really a clear answer. We have a follow-up call later today with Yahoo and Microsoft execs, so we’ll aim for more clarity on this and other topics. Our coverage continues…

For other live blogging of the press conference see:

Microsoft and Yahoo have jointly created the information portal, http://choicevalueinnovation.com, to share details of the deal with press and investors.

Photo by Yahoo.

Postscript by Barry Schwartz: The official transcript is now live at Microsoft.com.

See related coverage from us today:

Related Topics: Channel: Industry | Microsoft & Yahoo Search Deal | Microsoft: Business Issues | Top News | Yahoo: Business Issues

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About The Author: is a Founding Editor of Search Engine Land. He’s a widely cited authority on search engines and search marketing issues who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



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  • http://www.highrankings.com/newsletter/ Jill Whalen

    Wow. All that great technology Yahoo bought years ago (AltaVista, Fast, etc.) and they’re stuck using Bing? Poor Yahoo….

  • Kalena

    This is so depressing. MS is just priming them for takeover it seems. They should’ve just taken the billions last year

  • http://www.brickmarketing.com nickstamoulis

    I agree they should have taken the cash deal last year…

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