Wednesday, July 29, 2009

Microsoft and Yahoo Join Forces

It took almost a year but finally Microsoft and Yahoo join their paid advertising program to try to catch up with Google.

NEW YORK (CNNMoney.com) -- Microsoft and Yahoo reached a long-awaited partnership Wednesday in a bid to challenge Google's dominance in online search.

Under the 10-year deal, Microsoft will integrate Yahoo search technology into its existing Web search platforms. Microsoft's new search tool, Bing, will power Yahoo sites. Yahoo will sell premium ads on both sites.

Microsoft and Yahoo will share revenue on traffic generated on Yahoo's network.

The deal will allow Microsoft to "create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company," said Steve Ballmer, Microsoft chief executive, in a statement.

It was a partnership that was a long time in the making. Microsoft's (MSFT, Fortune 500) search market share has been slipping for more than two years, and the company has struggled to make its online advertising unit profitable. Meanwhile, Yahoo (YHOO, Fortune 500), once the search market leader, dropped to a distant second place behind leader Google (GOOG, Fortune 500) by 2007. Sphere: Related Content

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