Oh, it's on now. This morning, regulators in both Europe and the United States have approved a major search and advertising deal between Microsoft (MSFT) and Yahoo (YHOO), paving the way for the most dramatic contest for search since Google (GOOG) first arrived on the scene.
Under the terms of the deal, Microsoft's Bing will power Yahoo's search functions for 10 years, and Yahoo will pocket 88 percent of ad revenue sold by Yahoo. According to the Wall Street Journal, Bing should be up and running at Yahoo by the end of the year, at which time Google will face a technologically comparative search engine with a significant market share.
But how threatening is the new alliance to Google? It's hard to tell, at least at first. Inside the United States, Microsoft and Yahoo together account for roughly 28 percent of the search market share, while Google controls some 66 percent. It's an altogether different story in Europe, where, the BBC reports, Google controls 90 percent of the market. "The deal with Yahoo should turn it into a not-too-shabby and profitable world number two search engine," technology analyst Chris Green told the network. "But still no Google."
Still, this marks the first time that Google has faced a rival with both a sizable customer base and a search engine that delivers the goods. It frees up Yahoo to focus on other, more profitable elements of its business, and gives Bing a chance to expand its brand recognition. Stock in both companies has inched up on the news.
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