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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.
Microsoft has decided to terminate MSN Soapbox, their troubled entry in the personal video Web site space:
"We have decided to shut down the Soapbox feature," said Microsoft Vice President and MSN leader Erik Jorgensen in an e-mail. "Beginning today, July 21, we will be notifying both our customers and our internal and external partners that on July 29th, people will no longer be able to upload videos to Soapbox and on August 31st, the service will no longer be available."
Microsoft will continue to support MSN Video, which has 88 million unique users each month and delivers 480 million video streams each month, he said. Soapbox was responsible for less than 5 percent of MSN Video’s streams.
The hook for Soapbox was the social networking features, but apparently they were insufficient to lure the folks who love to video their personal whines for the delectation of others away from Google’s YouTube. Of course, it isn’t clear there is really a business in any of these video Web sites since YouTube is still finding it hard to make money with their overwhelming market share and many videos much more amenable to advertising than personal ramblings.
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.
Among the fallout from the latest round of Microsoft layoffs is the demise of the .NET Micro Framework, Microsoft’s embedded tooling for very low powered devices. Mary Jo Foley reports:
Microsoft is turning the source code for its embedded .Net Micro Framework over to the community and slowly withdrawing from that business, company officials are confirming.
On the rumored list of teams most heavily impacted by second wave of Microsoft layoffs announced on May 5 was the .Net Micro Framework team — as well as the related MSN Direct unit. Indeed, both groups were affected, a Microsoft spokesperson confirmed on May 6.
MSN Direct was originally a oddball FM broadcast service for devices like the infamous SPOT watches, but it had moved into other areas in recent years.
