On April 16, 2015 Yahoo published an announcement advising its users of an amendment to the existing search partnership between Microsoft and Yahoo companies. According to the announcement, the amended partnership will focus on strengthening the overall user experience, create additional value for advertisers, and establish stability for its partners. Yahoo was stern in stating that the relationship between the two companies have dramatically grown over the past five years. Therefore, it was necessary to focus on its evolution and agility.

Quite frankly I’m a bit skeptical about this announcement and its lack of clarity. Especially when Yahoo went as far as using the word “amended” which is clearly indicative of a pre-existing fracture in the relationship. Nonetheless, some changes are coming down the pike and as advertisers should be prepared for those adequately. Marissa Mayer, Yahoo’s CEO published an article on moving search forward which comprises of a condensed version of the full press release.

Possible Takeaways from ‘Moving Search Forward’ Announcement

Yahoo CEO Marissa Mayer was quite direct with her statement implying potential friction in the existing search relationship between Bing and Yahoo search engines. Also, it’s a hindsight behind the recent market recognition and acknowledgement of the Yahoo Gemini advertising platform. Conflict of interest perhaps?

“Over the past few months, Satya and I have worked closely together to establish a revised search agreement that allows us to enhance our user experience and innovate more in our search business,” said Marissa Mayer. “This renewed agreement opens up significant opportunities in our partnership that I’m very excited to explore.”

According to this statement, there are a few notations to take into consideration as this search partnership grows further.

  • Yahoo will have increased flexibility to enhance the search experience on any platform, since the partnership is non-exclusive for both desktop and mobile. Also indirectly stating that this will allow Yahoo to focus more on its Yahoo Gemini product and therefore providing room for it to flourish.
  • Yahoo will continue to serve Bing ads and search results for a majority of its desktop search traffic. Another shot at indirectly implying that the demise of Microsoft & Yahoo search partnership may be around the corner.
  • Microsoft will become the exclusive salesforce for ads delivered by the Bing Ads platform, while Yahoo will become the exclusive salesforce for Yahoo’s Gemini ads platform. Once again, Yahoo affirming its strong interest in pursuing the Paid Media route and regaining market share. Precisely the intent behind last year’s Yahoo and Mozilla search alliance formation. Ultimately allowing Yahoo to slowly step back into the paid media game.
  • Microsoft and Yahoo plan to begin to transition managed advertiser sales responsibilities this summer. So much for that promised profit sharing from Microsoft. Apparently that aspect of the search partnership wasn’t really panning out quite as expected either.

Microsoft & Yahoo Search Alliance At-A-Glance

Microsoft and Yahoo search alliance was formed in 2009 by prior CEOs. The intent was to form a transformative relationship between both companies. Microsoft agreed to provide paid media and algorithmic services on PC to Yahoo users. This must have been the loophole Marissa Mayer and her team discovered that ultimately allowed the deeper exploration of Yahoo Gemini advertising platform. Under the existing search alliance, Microsoft agreed to a revenue sharing agreement where a percentage of Bing Ads revenue generated from Yahoo searches was compensated in accordance. According to current Microsoft and Yahoo sources, this agreement remains unchanged. Perhaps until summer of 2015 when Yahoo may indeed be in full pursuit of its independence.

I’m truly led to believe that the demise of the existing search alliance between Microsoft and Yahoo is on the verge of a demise. Yahoo has been transparent and clear on multiple instances that Microsoft failed to deliver on its promise around revenue sharing. It may be too early to assume however given the historical behavior of this relationship I’m led to believe that the clock is slowly ticking.

Image Credit: Search Engine Land