Microsoft and Yahoo! have announced an agreement that will see Microsoft powering Yahoo! search, while Yahoo! takes care of premium search advertisers.
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The companies are hoping that the deal will enable them to rival Google. Their statement says, "Providing a viable alternative to advertisers, this deal will combine Yahoo! and Microsoft search marketplaces so that advertisers no longer have to rely on one company that dominates more than 70 percent of all search."
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.
Microsoft's Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business.
The 10-year agreement will take 24 months to implement fully and Yahoo! expects to boost profit by $500m and save $200m.
Under the terms of the deal, Microsoft will pay Yahoo! for a revenue share based on the amount of traffic Yahoo! generates.
The companies say the deal protects consumer privacy by limiting the data shared between the two, to the "minimum necessary to operate and improve the combined search platform". The use of search data shared between the companies will be restricted.
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