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Yahoo is Done Searching. Microsoft Gets Their Way (Sort of)

Posted by J Powers at 12:36 AM on July 29, 2009

bing yahoo

Well, it was a deal that was a year and a half in the making. Actually, it’s been longer than that – nonetheless, Microsoft has finally gotten what they want. While it still needs to have a final stamp of approval, it looks like Yahoo search will become Yahoo Search powered by Bing.

The real history is this: Back in 2005, Microsoft talked ‘Partnership’ with Yahoo to thwart the ever growing Google. That was during the Instant Messaging days – When it was announced that MSN Messenger and Yahoo IM would be able to talk to each other.

By May of 2007, Microsoft and Yahoo were in talks of an apparent $50 Billion dollar merger. While that didn’t happen, we started seeing the beginnings of the Mass Exodus of Yahoo. Employees such as Farzad Nazem – who was Yahoo’s CTO at the time – took retirement. That was followed by other key players in Yahoo’s stable.

However, the battle didn’t really start until Feb 3rd, 2008, when Steve Ballmer offered $41 Billion to take over the company. It was a long – drawn out battle that gave people like Carl Icahn a seat on Yahoo’s board and Jerry Yang the heave – ho as CEO. Since then, Yahoo has plummeted in stock price.

Carol Bartz took over as CEO in January 2009 with a renewed hope. However, the Yahoo name has been pretty stagnant until just a couple weeks ago when they revamped email. Closing services like Yahoo Music and Geocities helped Yahoo score a profit in Q2, but the search side had remained at a plateau.

Then along came Bing.

“I think actually Bing is a good product. ” Carl Bartz announces in a transcript. “It actually extends sort of the experimentation around search and how people use it instead of just thinking like a standard blue link.” She goes on with “…Microsoft should be given kudos for Bing.”

What is supposedly proposed is that Microsoft will take over the search engine side of things. Yahoo will continue with ad placement on the site. Yahoo is expected to get 110% of search ad deals until 2011, in which it will drop to 90%, according to Allthingsd.com.

The drama is expected to unfold in the next 24 hours as it is said to be a ‘done deal – with the formalities happening later today’. Right now, neither side is ready to comment.