Bing may have tipped the scales for Yahoo – the second largest giant in the internet world is fighting for the number two spot as encroachment by Microsoft’s new engine increases daily.
Acco0rding to unnamed sources, Yahoo will supposedly get paid a cool three billion up front, and get 110% of the revenue (after traffic acquisition costs) that its search revenue provides the partnership for two years, after which the payout drops to 90%.
This will leave Microsoft with a tidy 30% of the search market and the chance for Bing to start the long climb up to reach Google. Yahoo would benefit by locking in a substantial revenue stream from search and cutting hundred million dollars in costs over the next three years in unneeded development personnel.
Top executives at Microsoft (the SVP of the Online Audience Business Group Yusuf Mehdi, search head Satya Nadella and top digital exec Qi Lu) flew down to Yahoo turf Friday, in what one member of the group jokingly called ‘an entourage,’ although Ballmer didn’t make the trip.
Bartz and Ballmer have, however, acknowledged discussions between the two execs in onstage interviews at D7; Bartz said flat out she was open to the deal if good and reliable data and “big boatloads of money” were forthcoming from Ballmer.
Bartz has been focused on Yahoo management and marketing, whiole Ballmer poured himself into Bing – and Bartz bring a strong card to the table when it comes to advertising and brand recognition.
Carl Icahn–who engineered a restructuring of Yahoo’s board in a proxy fight and near takeover last year–is in favor of the deal.
“I’ve been a strong advocate of getting a search deal done with Microsoft,” said Icahn, who owns about 5 percent of Yahoo and now sits on its board. “It would enhance value if a deal got done, because of the synergies involved.”