Yahoo Microsoft ‘Search Alliance’ Encounters More FrictionBy: Chris Crum - October 22, 2013
More friction between Microsoft and Yahoo regarding the two companies’ “Search Alliance” has been made public thanks to court documents obtained by Reuters.
The two companies have been having a quiet legal battle about rolling out Microsoft’s Bing search technology on Yahoo in Taiwan and Hong Kong – the last two of sixteen markets – which are supposed to make the transition this month.
Yahoo apparently is uncertain about the direction the alliance is going to go in under new leadership at Microsoft, and wants to hold off until it determines that the next CEO is dedicated to the partnership.
The deal between the two companies was for a decade, but could end sooner, though Microsoft doesn’t intend to let Yahoo pull out without a fight, should it choose to try.
The partnership was implemented before former Googler Marissa Mayer was running Yahoo, and she has been critical of the results since she took over.
Either way, according to Reuters, a judge ruled on Monday that Yahoo has to go ahead and adopt Microsoft’s technology in the two remaining countries. The news organization shares a statement from Microsoft on the legal matter:
“We had a narrow disagreement regarding the Search Alliance rollout in Hong Kong and Taiwan. We have unwavering plans to continue investing in the Search Alliance, now operating in more than 20 countries, and the Bing platform, which is central to our latest products.”
Ahead of Yahoo’s earnings last week, Microsoft put out some numbers pertaining to the partnership.
On a quarter-over-quarter basis, click-through-rates are up 6.8 percent, while cost-per-acquisition is down 13 percent, according to David Pann, general manager of the Microsoft Advertising Search Group, citing research from RKG.
RKG also found thatt advertiser spend on the Yahoo Bing Network continues to grow compared to Google. It’s up 39% year-over-year, while Google is up 18%.
Pann wrote in a blog post, “A lot of that is driven by non-brand click growth, which is up 45 percent on Bing Ads due to investments in our marketplace algorithms. In addition, CPCs fell 2 percent overall as Bing Ads continues to drive improvements that benefit our advertisers. The report says ‘advertiser ROI has improved on Bing Ads even as the platform has been able to deliver big traffic increases with better ad-matching technology.’”