Yahoo! Inc. (NASDAQ:YHOO) and Microsoft Corporation (NASDAQ:MSFT) have inked a new partnership to make the search presence of the former better. Yahoo’s chief executive Marissa Mayer said that this deal had put a pressure on Microsoft to make a better product. The deal would also help the companies mint more money for the advertising platform.
She said that native advertising was a digital world’s fancy word for the banner ads that appear while a user uses the search engine on Microsoft Bing. The ultimate aim of the deal is to compete with Google
Inc (NASDAQ:GOOGL) and bring out a competitive product in the market.
Currently, Google has over 60% market share in online search and this monopoly has to be broken if Yahoo and Microsoft want to gain ground. Yahoo has been very serious about enhancing its search engine in the
last few months as the company is hoping to revive its revenue from the platform.
Yahoo Becomes Independent
Under the agreement, unlike before when Yahoo used Microsoft to serve the ads on its desktop search, the former will have freedom to not use the latter for the same from now on. This has been done as a way for
achieving new ways of generating revenue as the company has yet to show strong sales ever since Mayer joined. In the 4Q, Yahoo revenue fell 1.8% to $1.18 billion.
JP Morgan Chase & Co analyst are optimistic about this change and feel that Yahoo now enjoys the freedom to provide its own search results and can also work with Google for providing advertising on the
service. The integration of sales team will help Yahoo and Microsoft provide better services to advertisers.
Positive Move for Yahoo
Satya Nadella, chief executive of Microsoft, is positive about the deal too and Mayer added that she was excited to explore the opportunities that have been offered. When this deal was signed done in 2009, before the amendments that were made in April 2015, Yahoo shares fell by 12%.
Tech experts still feel that Yahoo’s search technology lacks behind and that has been the reason for its share in this domain, dropping. With a better search engine, this issue can be tackled.
