On 29 July 2009 Yahoo! and Microsoft announced an agreement that will, generally, result in Microsoft powering the Yahoo! search function and Yahoo! obtaining exclusive worldwide advertising sales rights.
Under the terms of the agreement, which is to last for ten years, Microsoft will acquire an exclusive ten year licence to Yahoo!’s core search technologies, and will have the ability to integrate Yahoo! search technologies into its existing Web search platforms. Yahoo! will become the “exclusive worldwide relationship sales force” for both companies’ premium search advertisers. Under the agreement, it is proposed that Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network. It is expected that the proposed deal with be notified, to antitrust regulators in both the US and Europe, as a deal which is pro-competitive and a challenge to Google in a market where the Google search engine has become increasingly powerful in recent years.
It is understood that Microsoft and Yahoo!, as a result of the proposed agreement, will have a combined market share of between 25 to 30 % in the US, providing a viable alternative to Google. In Europe, however, the companies would have a much greater distance to make up, with Google having approximately 90 % share of the paid search market. From an antitrust perspective, this may be beneficial to enhancing the apparent pro-competitive nature of the deal and reinforcing its credentials as assisting the emergence of a rival to Google.