Competition regulators in America and the EU are preparing to scrutinise a joint-venture planned between two mighty powers in the computing world. Microsoft and Yahoo have struck a ten year internet search-engine deal to challenge the runaway market leader Google.
It would mean Yahoo’s sites would use Microsoft’s new Bing search engine, and Yahoo would be responsible for selling the ads that appear on search pages for both companies. Yahoo reckons it will boost income by 500-million dollars a year — that is 350 million euros — bring savings, and improve cash-flow.
Internet search advertising is worth about 20-billion euros, and the two partners want a bigger share of the pot dominated by Google.
Steve Ballmer, the Microsoft CEO said: “Right now there is one company that really dominates that worldwide market for search and online advertising. The partnership we are announcing today will help to create a stronger number 2 and increase competition in the search area.”
Ballmer claims Google has 92 per cent of that search engine ad-revenue in Europe and about 70 per cent in the US. Advertising executives like the idea, hoping it will help push marketing costs down. The partnership still has to pass the regulators, and that could take 2 and a half years.