Changes in our Yahoo partnership
Overview
What changed in the revised agreement between Yahoo and Microsoft?
First, Yahoo has increased flexibility to modify the search experience on any platform, since the partnership is non-exclusive for both desktop and mobile. Yahoo will continue to serve Bing ads and search results for a majority (at least 51%) of its desktop search traffic.
Second, the update increases agility and sales focus. Microsoft will become the exclusive salesforce for ads delivered by Microsoft’s Bing Ads platform. Integrating the sales teams with those responsible for engineering will allow us to service advertisers more effectively.
Yahoo and Microsoft will develop a plan to transition premium advertisers for Microsoft’s paid search services to Microsoft commencing on July 1, 2015 and to be completed by January 31, 2016.
What does this mean for Bing Ads? How should I think about Bing Ads in my media and budgeting strategy?
Bing Ads will continue to be critical to search advertisers. In fact, comScore recently announced that Bing surpassed 20% market share on PCs in the US, and we expect that will continue to grow. The combination of Bing’s own current share with at least 51% of Yahoo PC search query share means that Bing Ads will provide at least 26% of total search query market share (comScore qSearch (custom) US March 2015) – that is more than one in four searches! That represents a potential maximum reduction of only 6 percentage points of share. In addition, innovations like Bing’s integration into Windows 10 will further grow the volume of queries served by Bing – and opportunities for Bing Ads customers. In fact, Microsoft expects there to be 1 billion Windows 10 enabled devices within 3 years. Therefore, advertisers should not make any major changes in their approach or investment strategy to Bing Ads.
Common questions about these changes
Where can customers go to get information on the outcome of the partnership, and customer transition?
The customer experience during this transition is a top priority for both Yahoo and Microsoft. Customers can expect to receive communications in the coming weeks as details are developed. We understand that customers are excited and may want more information. We will be proactive in timelines and transitions as we have the information. For any urgent requests contact your Yahoo account manager.
What is the timeline for migration?
Microsoft and Yahoo will be developing a joint transition plan, inclusive of account migration timing and process to ensure the best possible customer experience. While initial transitions will start in July, the exact date for any specific advertiser account may vary. Further details will be coming in the next few weeks.
What will happen to the relationship with our existing syndication partners (e.g., Amazon, Apple, etc)?
There is no impact on existing syndication agreements.
How will the 51% minimum PC volume commitment affect Bing Ads?
While Microsoft will retain a 51% minimum traffic guarantee, Yahoo now has the flexibility to innovate on up to 49% of their queries. Despite this flexibility, Microsoft fully expects to compete for and win more than 51% - notwithstanding the minimums. Through large investments in sophisticated marketplace algorithms, a suite of rich ad products and robust reporting and tools, Bing Ads has proven itself as a world-class search advertising platform that can offer an efficient marketplace for advertisers while delivering a superior return for Microsoft partners. Microsoft is committed to keeping our customers informed on volume changes to the marketplace to minimize any disruption to their campaign planning.
What about the quality of that volume — should I expect changes?
We expect traffic quality of Bing Ads to remain at current levels.
How does the termination clause affect MSFT’s relationship with Yahoo? Do you remain committed?
Microsoft remains committed to our partnership and the amended version of the agreement. The changes, inclusive of the clause, show a deeper trust between the companies. In the unlikely event of a separation, both companies are committed to the best possible customer experience.
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