Yahoo, Microsoft Partner After Years Of Talks
STEVE INSKEEP, host:
Let's hear more now about a deal that could change the way that people search the Internet. Microsoft announced today that it has reached a deal with Yahoo. It's a direct challenge to Google, the big search engine company, and these two companies plan to combine their search engine technology. We've called Todd Bishop, managing editor of TechFlash.com. He's covering the story from Seattle. Good morning.
Mr. TODD BISHOP (Managing Editor, TechFlash.com): Good morning, Steve.
INSKEEP: I am looking here at a Yahoo.com page. It's got the search line on the top where I can type in something and find out what's going on. How's it going to change, if in any way?
Mr. BISHOP: Well, to the average person, it won't change a whole lot. But essentially, behind the scenes, Microsoft's Bing technology will be powering that search experience if the companies are able to get regulatory approval for this deal.
INSKEEP: Okay. So if it's going to look the same, but there's going to be some different software running in the background, what difference is it to the companies involved, Microsoft and Yahoo?
Mr. BISHOP: Well, Microsoft and Yahoo combined are in second and third place against Google. And if you take those two together, they'll have about 30 percent of the search market, compared to Google's 65 percent. And they say that will give them the critical mass they need to give advertisers a real choice against Google.
INSKEEP: Oh. So they're trying to get enough millions of eyeballs that they can sell a big package to advertisers of, basically, the Microsoft search engine and a Yahoo search engine at the same time?
Mr. BISHOP: That's precisely it. And there will be a lot of behind-the-scenes relationships going on between the companies. They'll be having Yahoo, for example, sell search advertising - premium search advertising, sort of the relationship-based advertising sales. But Microsoft's technology will be essentially powering all of it underneath.
INSKEEP: I just typed in on the Yahoo search engine, I typed in the word Microsoft, and I get some ads on the right-hand side based on my search, here. You're saying that if I did that on the Microsoft engine or the Yahoo engine in the future, I might get the same ad, and the same advertiser paid the same dollars to get it both places.
Mr. BISHOP: That's precisely right. That's precisely right.
INSKEEP: All right. Now, is that going to just mean a little bit more money for these two companies, or is it a bigger deal than that?
Mr. BISHOP: Well, long term, they're hoping that this will essentially change the landscape and give them a real leg up against Google, which has, you know, upwards of 70 percent of the market. And so they're hoping that this will give them the kind of momentum that will let them innovate and make the search experience better over the long term. The real question is whether or not this is going to be something that actually does change the game in that way and whether regulators will approve it by next year.
INSKEEP: Are Microsoft and Yahoo going to be able to work together, given that they've tried for years unsuccessfully to work together, and there was even an unsuccessful attempt to merge?
Mr. BISHOP: That's a great point. It was a year and a half ago that Microsoft actually tried to acquire Yahoo for many billions of dollars, and Yahoo rebuffed it. Since then, Yahoo has brought on a new CEO, Carol Bartz, from Autodesk, which has a relatively good relationship with Microsoft. It will be interesting to see how this plays out, but they certainly do have a better relationship, at this point, at the executive level than they have in the past.
INSKEEP: Okay. Does Google seems scared at all?
Mr. BISHOP: You know, Google has not yet reacted this morning. But with, you know, upwards of 70 percent of the market, obviously, they're in a very good position at this point. I think this is the type of thing that will play out over the next year, two years. And so in that way, it'll be something that could be a longer term challenge to Google, but in the short term, probably won't have as much of an impact.
INSKEEP: Well, I guess if you're the search engine that's on top, you have to be aware of the fact that everything can change on the Internet overnight, practically.
Mr. BISHOP: Absolutely. And obviously, Google itself isn't standing still. It's trying to innovate in its core search experience, and it basically will have a slightly bigger competitor to compete with at this point.
INSKEEP: Todd Bishop, managing editor of TechFlash.com. Thanks very much.
Mr. BISHOP: Oh, it's my pleasure, Steve.
INSKEEP: This is NPR News.
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