The deal’s big winner is Microsoft, which makes no upfront cash payment and gets Yahoo!’s reach now for its advertisers. Yahoo! wasn’t compelled to do this deal but perhaps the board and the market pressure was too much.
Yahoo! gets some revenue guarantees, access to search data (for BT on other properties) and doesn’t have to invest many resources in search going forward. Longer term, however, this is probably not a good deal for Yahoo! but we’ll see.
Stock is down right now:
There are lots of open questions:
- What happens to SearchMonkey and similar initiatives, etc.?
- Microsoft and Yahoo! have said they’re still competitors. How will that affect the execution of this deal?
- How does this affect Yahoo!’s newspaper relationships?
- What happens to specialized vertical search on Yahoo! properties: Local/Maps, News, Real Estate, etc.?
- How will the anti-trust arguments play out? In my mind there are legitimate anti-trust arguments to be made but they’re unlikely to succeed. EU scrutiny will be tougher than US.
- What happens in 10 years when the deal is up?