The terms are all laid out in detail in the release, with some color provided in the live blog entry and related posts.
Basically Bing and adCenter become the algo and paid back end for Yahoo! Search (what happens to YOS-related search initiatives? unclear). Yahoo! will handle sales of “premium search.” All the self-service paid search will be direct through adCenter. Yahoo! controls the UI on all Yahoo! properties. Search will be “powered by Bing.” I discuss mobile (basically a mirror, but not 100%) at LMS.
Microsoft is guaranteeing revenues to Yahoo! Yahoo! is turning over search to Microsoft essentially though it “owns” the user experience on its properties. The combined Yahoo!-Microsoft marketplace will represent roughly 30% of search in the US, lower outside. Ads will appear on both properties.
There will be regulatory hurdles in the US and Europe but it will probably be approved ultimately. It will be tough for Google to argue directly against this given the company’s dominant position. However there are “abstract” anti-trust arguments to be made.
Some people at Yahoo! will lose their jobs or be hired by Microsoft. Execution will take up to two years assuming regulatory approvals.
Impact on local? Probably not much in the near term. Greater scale and reach will appeal to advertisers doing geotargeting. It’s not clear whether ATT-YP.com will see any benefit (they’re MSFT’s local ads partner for search monetization). SMBs won’t see any immediate changes or difference. All the challenges of reaching SMBs remain.
How does this affect Yahoo!-NP consortium? Presumably not at all or they will get access to greater reach via search market. Should bring more efficiency to Local SEMs now only working with two platforms (Google, Microsoft/adCenter).
This is the deal MSFT wanted before, with different financial terms. Yahoo! gets guaranteed revenues over 10 years (less after 5) and reduced costs. But Yahoo! is essentially out of the search business.
Photo Provided Courtesy of Yahoo!/Microsoft