As we’ve previously reported the Yahoo – Bing marriage of convenience has been on shaky ground and, five years into the 10 year arrangement, Yahoo has been aggressively renegotiating the deal which it clearly wasn’t benefiting from.
Up till now, all Yahoo’s organic search results and paid search ads on desktop PCs were provided by Bing, with Microsoft taking a portion of the revenue for its ads. From next month that all changes.
Yahoo will only be required to use Bing for 51% of the search ads and organic search results that it displays. So 49% of the time Yahoo can sell its own search ads or pull search ads from another provider, such as Google (which is the case for Yahoo in AU & NZ as we explained here).Yahoo also threw sales responsibilities for Bing ads back over to Microsoft and when Yahoo runs a Bing ad on its site, it now keeps 93% of the revenue instead of 88% .
Yahoo also has the right to take Bing’s algorithmic search results without taking Microsoft’s ad listings next to those results. If it does this, Yahoo will owe Microsoft a fee for serving the search results, but won’t owe it any revenue share from the ads.
Probably most notable is that, after October, either company can terminate the agreement “at will.”
Why should you care?
All this points to Yahoo getting back into search directly themselves. We think that Yahoo is playing for time whilst it readies the search engine it’s rumoured to have been developing. Should this happen then it could mean more competition for Google which in theory should be beneficial to advertisers who, as noted in our other story this week, are pay ever increasing fees to Google.
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