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Microsoft + Yahoo: What’s It All Mean?


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Presentation from SMX West 2010 by Justin Merickel, VP, Marketing and New Product Development, Efficient Frontier

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Microsoft + Yahoo: What’s It All Mean?

  1. 1. YHOO-MSFT Search Deal<br />SMX WestMarch 2010<br />
  2. 2. Why MSFT-YHOO? It’s All About Share!<br />Paid Click Share by Engine<br />(Efficient Frontier Index)<br />It takes >20% market share to establish<br />relevancy to a large base of advertisers.<br />2<br />
  3. 3. The YHOO-MSFT Dance<br />Dec 2009<br />Definitive Agreement Signed<br />2H2010<br />Deal Implementation<br />Jan 2009<br />Carol Bartz New CEO at Yahoo<br />Feb 2008<br />MSFT Offers $31/Share<br />2008<br />2009<br />2010<br />Jul 2009<br />Letter of Intent for Search Partnership<br />Feb 2010<br />US and EU Clearance Granted for Deal<br />May 2008<br />MSFT Withdraws Offer<br />3<br />
  4. 4. The Salient Points of the Deal<br /><ul><li>Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing Web search platforms
  5. 5. Yahoo! will become the exclusive worldwide sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform.
  6. 6. Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology
  7. 7. Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88 percent of search revenue generated on Yahoo!’s O&O sites during the first five years of the agreement
  8. 8. Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country</li></ul>4<br />
  9. 9. Key Benefits<br />Risk: Can Yahoo stay relevant in search?<br />5<br />
  10. 10. Advertiser Benefits and Risks<br />6<br />
  11. 11. CPC Variance Between MSFT & YHOO<br />7<br />
  12. 12. Questions?<br /><br />Follow Us:<br />8<br />