Microsoft unhappy with Google-Yahoo deal

Microsoft grumble about the Yahoo! / Google deal but acknowledge that they were slow off the blocks in the great search race.

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The recently announced partnership between Google and Yahoo, under which the former will serve ads on Yahoo’s search results pages, has not gone down well with Microsoft.

Senior executive Kevin Johnson has been criticising the deal between the two rival search engines, saying that the deal would prove to be anti-competitive and would not provide good value for advertisers.

Speaking at the Cannes International Advertising Festival, Johnson responded to comments from Yahoo’s Hilary Schneider about the search ad deal, a 10-year agreement that Yahoo hopes will add $800m in to its annual revenues.

Schneider commented that the deal would make Yahoo more competitive:
“This is very much about supercharging Yahoo to be more competitive. Opening up to Google is recognising that part of the search query marketplace Google has better coverage.”

She also described the partnership as a ‘win-win’ for two companies, to which Johnson replied:
“If win is consolidating around 90 percent of the paid search with Google, you can say, ok, Google would do that as a win.”

“I don’t think that from an industry perspective that supports having choices and having a number of strong players in the advertising business.”

Meanwhile, Microsoft CEO Steve Ballmer has been talking to the FT, lamenting the fact that Microsoft was slow to pick up on the potential of internet search:
“I do fault us for the speed with which we dove into search, primarily because we didn’t see the business model. And I give Google credit for innovating in the business model around search. They did a nice job on that, and that’s why they won.”

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