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Microsoft-Yahoo’s Search Deal gets extension as Bing holds 20% of US desktop search market


Microsoft (NASDAQ:MSFT) and Yahoo (NASDAQ:YHOO) have renewed their Bing partnership, which according to many, needed restructuring and changes due to the evolving climate of search. The original deal, which Yahoo CEO Marissa Mayer disliked a great deal – has been tossed out and puts Yahoo in a better position moving forward. However, it still preserves some of the original advantages that Microsoft had, in actually creating that agreement – when the deal was first signed a decade ago by former CEO Steve Ballmer.

However, even with Mayer’s discontent with the old deal, she pointed out that, “search has, and will continue to be, an incredibly important part of Yahoo.” Clearly, the company wasn’t going to be able to move away from search entirely without compromising their operation. This though puts them in a position where they can fully handle the load that is being placed on them. It’ll even give Yahoo some freedom to develop and work through search individually while taking some of the liberties that Microsoft had in the old deal away.

Things like having access to Yahoo’s search code, are things that will now become non-existent. Microsoft will no longer have that in the new deal, and it will be limited to providing search results, and some ads, instead of all search results on the desktop platform. Basically, it takes exclusivity away from the company who is seeing their overall search usage increase.

This new deal, and the news as a whole that the two will continue working together comes at a time when many who watched the company didn’t think it would materialize. Many thought that it felt too soon, or that the companies had simply outgrown the partnership. One thing for certain though is that Yahoo is gaining some freedom when it comes to this deal. The other thing is that Microsoft is still gaining market share when it comes to search – so their business is as strong as ever in the search industry.

Now, it’s just a matter of Yahoo re-entering that market – and having a place at the table, despite the fact that they’re currently sitting in an awkward position – should they attempt to create a better search platform, while still working with Microsoft.

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