Yahoo & Microsoft revise 6-year-old search deal

Microsoft and Yahoo have announced that they have amended their search partnership in a way that improves the search experience, creates value for advertisers and establishes ongoing stability for partners. Over the past five years, the search advertising market and both companies have changed dramatically.

What is changing?
The update increases customer focus. Yahoo will now have increased flexibility to enhance the search experience on any platform, since the partnership is non-exclusive for both desktop and mobile. Yahoo will continue to serve Bing ads and search results for a majority of its desktop search traffic.

Microsoft will become the exclusive salesforce for ads delivered by Microsoft’s Bing Ads platform, while Yahoo will continue to be the exclusive salesforce for Yahoo’s Gemini ads platform. Integrating the sales teams with those responsible for engineering will allow both companies to service advertisers more effectively. Microsoft and Yahoo plan to begin to transition managed advertiser sales responsibilities this summer.

The changes come at a time that both companies continue to be niche players in search ads compared to the likes of Google. Google are by far the leader in search and are predicted to have a 54.5% share of the total global search market in 2015, with Baidu in second but at a large distance behind at 8.8%.

Both Microsoft and Yahoo have been developing strong, but different, focuses on mobile. For Microsoft, the company has been building out its apps to work across different native platforms to tap into Android and iOS popularity, while also continuing to plug away at its own still-small platform and device businesses. Meanwhile, Yahoo has been honing its focus on how it can grow traffic on its own mobile properties while also building out tools for developers to extend Yahoo’s reach into other apps – one way of growing its ad business and sidestepping the race for critical mass on desktop search.