Looks like Carol Bartz made the deal many believe she was hired to make: Microsoft and Yahoo today announced a ten-year partnership to take on Google’s dominance of the search market. Under the agreement, each company will maintain its own advertising business and sales force. Microsoft will pay Yahoo for traffic generated through its owned and affiliated sites and will pay Yahoo an initial rate of 88% of search revenue generated on Yahoo’s owned and operated sites for the first five years of the agreement.
The Wall Street Journal says that this poses a serious threat to Google’s model, as it makes it easier for advertisers to pick one outlet.
Investors seem underwhelmed as Yahoo’s shares are own 7% in pre-market trading and Microsoft’s are up less than 1%.