After more false starts than I really care to recall, Microsoft and Yahoo today announced that they had reached an agreement to combine their Web search businesses to better compete with Google. The gist of the deal is that Yahoo is giving up on Web search and hiring Microsoft to handle it for them:
Not called out explicitly is what will happen to the Yahoo Publishers Network and Microsoft PubCenter which are rivals to Google’s AdSense in serving contextual ads to 3rd party publisher Web sites. Presumably, YPN is toast and the fledgling Microsoft PubCenter will assume their publisher relationships.
So where’s the pony? For Yahoo it is pretty clear – they dump the expense of running and monetizing a search engine while Microsoft pays them 88% of search revenue generated on Yahoo’s owned and operated (O&O) sites during the first 5 years of the agreement. (Also "Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.") Yahoo used Google for search from 2000-2004 before they tried to do it themselves – now they have shuttered the in-house effort as a failed project and gone back to a "content site" strategy.
For Microsoft. however, the pony is all in the future. They have irretrievably made Steve Ballmer’s "big bet" on search and purchased a whopping chunk of search market share – approximately 28% compared with Bing’s current 8%. Now they will have to deliver on it. The press release does not explicitly state the conditions under which either partner can ditch this deal, but the chances of it in the next few years have to be exceedingly slim.
Finally, the partners apparently suspect a length regulatory review and the agreement is not hoped to close until early 2010.
Today Microsoft unveiled its latest attempt at arresting its decline in Internet search with an enhanced Live Search rebranded as Bing:
Microsoft Corp. today unveiled Bing, a new Decision Engine and consumer brand, providing customers with a first step in moving beyond search to help make faster, more informed decisions. Bing is specifically designed to build on the benefits of today’s search engines but begins to move beyond this experience with a new approach to user experience and intuitive tools to help customers make better decisions, focusing initially on four key vertical areas: making a purchase decision, planning a trip, researching a health condition or finding a local business.
The result of this new approach is an important beginning for a new and more powerful kind of search service, which Microsoft is calling a Decision Engine, designed to empower people to gain insight and knowledge from the Web, moving more quickly to important decisions. The new service, located at http://www.Bing.com, will begin to roll out over the coming days and will be fully deployed worldwide on Wednesday, June 3.
The "decision engine" approach seems to be an an attempt to sidestep the Internet search titans of Google and Yahoo by claiming to provide a different service and experience. Don’t expect general decision making assistance however:
Microsoft’s research identified shopping, travel, local business and information, and health-related research as areas in which people wanted more assistance in making key decisions. The current state of Internet search isn’t optimized for these tasks, but the Bing Decision Engine is optimized for these key customer scenarios.
The areas identified are also ones where a lot of ads can be sold too, of course, and Microsoft can also rope in some of their other properties:
Microsoft’s mapping platform, Virtual Earth, will now be branded as Bing Maps for Enterprise. More information can be found here.
Technology from Microsoft’s April 2008 acquisition of Farecast is now a central part of Bing Travel. More information coming soon.
Microsoft’s popular cashback program, now dubbed Bing cashback, with more than 850 merchants and more than 17 million products available, will be fully integrated into the Bing Shopping experience.
While all this lucrative decision making assistance is swell, what will elevate Bing above a mere shopping site will be the way it handles day to day search queries for average Internet users. There have apparently been improvements in that regard under the covers and more visibly there is a search results "table of contents" on a sidebar to help refine queries as well as improved text previews of results via technology from acquisition Powerset. As a sample of one, Search Engine Land’s Greg Sterling says:
My overall assessment is very positive. Kumo, now Bing, has performed well and I’ve been satisfied with the results. There haven’t been any significant deficiencies or missing links (so to speak). While there have been a few occasions where I’ve found Google results to be better, the substantial gap that existed between Google and Live Search is largely gone with Bing.
Still, success will determined by the number of Internet users habitually going to Bing for Internet search. Microsoft apparently plans to spend $80 to $100 million for promotional advertising in order to bring in crowds to kick the tires at least once and then they get to vote with their mice every day.
Microsoft beta launched their Web "answers" site as Windows Live QnA in August 2006 and it never made it out of beta – MSN QnA will be closing May 21, 2009.
We are ending the QnA beta test and are closing the QnA site on May 21, 2009.
First and foremost, we want to thank you for your participation. Since we introduced QnA, we’ve learned a lot about this new way of communicating and creating valuable content. At this time, we are closing the QnA site, but the experience of running QnA and gathering all of the great feedback you’ve shared with us will certainly influence future product direction.
When QnA moved from the Live Search organization into MSN we announced that we’d be looking for new ways to share questions and answers across MSN and provide new opportunities for you to engage with each other and share your opinions, ideas, and knowledge. That mission has not changed. Questions and answers are still important to MSN and your feedback has been very valuable for our future product strategy. You’ll see more ways of how MSN will empower people to connect and communicate over the coming months.
I must have missed the branding transition to MSN from Windows Live, but then it looks like everybody else did too. The Web answers biz is completely dominated by Yahoo Answers – even Google had to pull out of it – so it is no surprise that QnA had a hard time getting traction.
Carol Bartz, the newly minted Yahoo CEO is a trifle dubious about the oft rumored sale of Yahoo’s search business to Microsoft:
Yahoo Inc’s new chief executive, Carol Bartz, told employees on Wednesday her gut instinct is to hang on to the company’s search business, according to a person familiar with the company.
But Bartz also told staff she needs to better understand the pros and cons involved in selling the business. Bartz said her first instinct was to ask why the company would need to sell the search business.
A very good question to which the only answer is continuing ineptness which isn’t a good answer. The Yahoo stock price dropped 6% when this news came out since shareholders would like a quick payday as always, so it will be interesting to see if Bartz can stick with her initial position.