Microsoft, Yahoo search deal will change cloud app landscape

Microsoft wants to hurt Google before Google steals the enterprise.

After a year and a half of negotiating, Microsoft and Yahoo finally announced a search deal partnership. Redmond's new search engine, Bing, will become Yahoo's search platform. Yahoo's sales force will be in charge of handling both companies' search advertisers.

The deal will give the partners 30 percent market share in search and will take up to two years to fully implement. But make no mistake. This is not about search. It is about hurting Google in its cash flow to stop the folks in Mountain View from completely killing Microsoft's enterprise software business. Microsoft is also, of course, hoping to appease its poor shareholders by turning its expensive search operations into profitable businesses.

Online advertisers (which includes just about every business on the planet) will be relieved to have a viable competitor to turn to. Google's increasing monopoly has made no one comfortable.

While the deal involves search, perhaps Microsoft can benefit in other ways. Prior to the whole attempt by Microsoft to acquire Yahoo, which completely derailed the already-faltering Yahoo, Yahoo had been doing a great job at producing innovative Web applications. Indeed, until Google stole Yahoo's market share, it was Yahoo's innovations that everyone turned to. It pioneered concepts like Yahoo Finance and personalization. It built cool and useful tools like Yahoo Pipes and Fire Eagle -- the kind of no-one-is-doing-this-yet Web applications that Microsoft sorely needs if it is to compete with the onslaught of ideas generated by Google. The agreement, however, says that Web applications are not covered by the deal and the two will continue to compete against each other in these areas. Here's hoping they see the light and collaborate more than compete.

Microsoft and Yahoo posted a joint press release outlining details of the partnership, including video statements from Microsoft CEO Steve Ballmer and Yahoo CEO Carol Bartz.

Here is a news report that highlights the Ballmer/Barzt video:

Read all about it! More stories on the long-time-in-the-making Microsoft/Yahoo search deal:

Does Yahoo-Microsoft Deal Make Google Sweat?

Microsoft, Yahoo alliance would target Google

Microsoft, Yahoo Deal: Why You Stand to Lose

What the Microsoft-Yahoo-Bing Deal Means for You

What Will Google Do About The Microsoft-Yahoo Deal?

Microsoft, Yahoo deal was a long time in the making

Microsoft-Yahoo search deal: 3 reasons why it makes sense

CEOs: Devil was in details of Yahoo, Microsoft search tie-up

Visit the Microsoft Subnet web site for more news, blogs, podcasts. Subscribe to all Microsoft Subnet bloggers. Sign up for the bi-weekly Microsoft newsletter. (Click on News/Microsoft News Alert.)

Follow Microsoft Subnet on Twitter

Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.

Copyright © 2009 IDG Communications, Inc.

IT Salary Survey 2021: The results are in