New York — Microsoft and Yahoo have finally finalized the terms of a comprehensive search and advertising services and sales and license services agreement, but the two companies still wait for regulatory approval. The news seals the terms of the agreement announced in July, intended to help them compete more effectively with Google.
Before Microsoft’s Bing and Yahoo can actually begins working together, the deal is subject to approval by Government regulators, a milestone which the companies are expecting will be achieved as early as next year.
The companies announced the agreement, in which Microsofts Bing search engine would power Yahoos search results and Yahoo would deliver premium search-advertising services for both companies, in July.
They had expected to finalize the deal in late October but needed more time to work out the details. Once the deal is approved by regulatory bodies, Microsoft hopes to begin powering Yahoo’s search engine services in US by the middle of next year.
In a statement late last week, both the companies stated that they anticipate the transaction will close in early 2010 and that they welcome the broad support the deal has gotten from key players in the advertising industry.
Sunnyvale-based Yahoo and Redmond, Wash.-based Microsoft said in a joint statement that they hope “this deal will create a sustainable and more compelling alternative in search that can provide consumers, advertisers and publishers real choice, better value, and more innovation.”
The deal, which would place Microsoft’s Bing search tool on Yahoo’s search pages, is already under scrutiny by regulators in both the U.S. and Europe. In October, four ad executives and the president of the American Association of Advertising Agencies sent a letter to the U.S. Department of Justice in support of the agreement. The DOJ is still reviewing the deal for possible antitrust concerns.
Although the common goal is to try and outrace Google, both the firms involved have their individual motives as well, which they are hoping will be fulfilled via the deal. While Yahoo is hoping to cut costs with the arrangement, Microsoft is viewing it as an opportunity to increase the market share of its Bing search engine.
Yahoo has accepted to enable Bing on its Internet sites in return for 88% of the revenue from search ads for the first half of the 10-year deal that is expected to be completed early next year.
The partnership and its terms are currently being reviewed by the antitrust regulators at the U. S. Justice Department.