Wednesday, July 29

It's Official: Microsoft Assimilates Yahoo! search.

The deal is official and Yahoo! search is dead. Search will be outsourced to Microsoft. Danny Sullivan at SELand liveblogged the conference call. There's also coverage more coverage on TechCrunch and SearchEngineLand.

Highlights of the deal from SE Land:
Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms.
From the QA in the conference call via Danny:
Revenue to Microsoft? Couple hundreds of millions of costs over the first two years. Upsides really come as able to improve relevance of search product. Ads are part of relevance. Then improve monetization on Microsoft and Yahoo site.
What does this mean for search teams at Y!? According to Carol:

Yes there are many Yahoo search employees who will be asked to take jobs at Microsoft. There will also be search employees who we look to help us on the display side. And then unfortunately there will be some redundancy in Yahoo.

Danny has more details on the Microo-Hoo deal:
The deal covers “web, image and video search.” Mehdi explained there will be a single crawl and a single index that both parties will have equal access to — “parity” in his words.
The interview also reveals that Microsoft will be taking on responsibility for BOSS and SearchMonkey, as he says: "incorporating the best of Yahoo’s search assets and user experience into its platform and technology".

On the plus side for Microsoft, the teams there now have access to the Y! search platform and tools, including Panama. More importantly, they'll have access to search and log data from Yahoo!. This is an important resource for improving the relevance and quality of Bing's search and advertising. Kudos to them for pulling it off. I think it will result in improvements to Bing and a stronger competitor to Google.

Overall, I think this is bad news for Google and the long-term future of Yahoo!. I think Carol Bartz is underestimating the value in owning a platform that can search and analyze the entire web. The data and algorithms used to improve web search provide strategic knowledge and can be leveraged to improve the overall Y! experience across many of its properties. It will also lose the ability to deeply integrate search into its products because it won't control the platform.

Y! has been a strong supporter of IR research. They have a history of providing academic access to the BOSS API, cluster resources, internships, and other forms of support. I hope that MS steps up its support to avoid shortfalls in these areas.

I think it's a sad day in search when a big player gives up. My thoughts and best wishes to all my friends and colleagues working on search and infrastructure at Y!.

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