Five Things You Should Know About the Yahoo-Microsoft Search Integration

With Completion Expected by October, Deal Involves A lot of Moving Parts and an Aggressive Timetable

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NEW YORK ( -- Call it a hand-holding tour. Yahoo and Microsoft executives and a small army of consultants will be making the rounds to agencies and marketers this summer to tell them what they need to know about the integration of the two search engines to create a stronger competitor to Google.

Meanwhile, the planning phase is over and both sides have embarked on the complex task of connecting Yahoo's search front end to Bing's search technology. The entire process is scheduled to be complete in October, but much has to happen between now and then. There are a lot of moving parts, and historically, these things don't go smoothly. So what should you watch for in the Yahoo-Bing integration?

The fourth-quarter timing
The timeline doesn't give marketers much leeway to test the system before the holiday season. "Launching in Q4 seems to offer marketers a lot of risk for very little reward," said Bryan Wiener, CEO of digital agency 360i. Yahoo execs say if it appears they can't reach desired quality levels, the deadline will be pushed until 2011. "Our priority is to transition with quality -- quality judged by achieving business results for advertisers and publishers," said Mark Morrissey, Yahoo senior VP and head of the search alliance.

Marketers' learning curve
Theoretically, search advertisers know how Yahoo ads perform and how Bing ads perform. But how will they perform together? And will marketers take the plunge before the holiday season or move spending to Google? "We don't know exactly, but we're anticipating that it will be a blended average, so bids will adjust to appropriate levels," said Kevin Lee, CEO of search-marketing firm DidIt.

Can Microsoft execute?
Every Yahoo-Microsoft advertiser will need an AdCenter account to use the combined system, but AdCenter isn't ready for the volume. Key to meeting the deadline will be whether Microsoft can deliver two new releases of platform, the second built to handle the additional volume. "Largely, it is about Microsoft hitting delivery dates that will dictate the schedule," Mr. Morrissey said.

Yahoo and Microsoft's working relationship
Microsoft isn't the easiest company to partner with, but there's a sense that this can't be allowed to fail, and so far, so good. It doesn't hurt that the head of Microsoft advertising, Qi Liu, once ran Yahoo search, and several other Microsoft execs also worked on Yahoo's Panama platform. It also doesn't hurt that about 400 Yahoo search employees are migrating to Redmond. Meanwhile, former Microsoft search advertisers have to meet their new sales reps from Yahoo.

Will it matter?
Fundamentally, advertisers go where the queries are, and so far Bing's gains appear to be coming directly from Yahoo, which won't help in the competition with Google. "It's like pulling change out of your right pocket and putting it into your left," Mr. Weiner said. If the search transition was finished today, combined query share would be 29.5% in the U.S. What will it be when October rolls around?

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