Yahoo and Microsoft combine forces to challenge Google

Yahoo will receive at least $150 million by the middle of 2009 from Microsoft if the two companies can close an advertising and search agreement, according to reports. In a related incident at Barclays Capital Global Technology Conference, a Yahoo executive stated that Yahoo was already grooming certain engineers to be shuffled over to Microsoft. Yahoo’s engineer grooming efforts have apparently been underway for some time and ultimately will target at least 400 existing search engineers. "We are well down the line; we have dedicated teams running the search business and running the transition of the search business," Yahoo chief financial officer Tim Morse said during the Barclays Capital Global Technology Conference. On Dec 4th, Yahoo and Microsoft announced their agreement to position Bing as a more viable contender to Google in 2010. By combining Bing with Yahoo’s current market share, experts predict that the partners will assume 30% of the existing search engine market in North America. The deal also calls for Bing to become the back-end search technology for all of Yahoo’s sites, while Yahoo assumes worldwide sales efforts for both companies. Yahoo can be released from the 10-year agreement if Google’s RPS (revenue per search) becomes higher than the combine RPS rates of Microsoft and Yahoo. Yahoo can also terminate the contract if Yahoo’s RPS rate is lower than Google’s 12 month average RPS. Mike Albee [LA Business Tech Examiner]