Lets take a look at the evolution of SearchEngineLand posts on Yahoo Microsoft deal. There’s been no shortage of coverage on the Yahoo-Microsoft search deal. I’ve been involved directly in search and covering it since 1997, and in my opinion Danny Sullivan is the best on search coverage. He’s been historically there in the front row documenting this evolution. Kara Swisher nailed the reporting, but Danny and Greg over at SearchEngineLand have the best detailed coverage and editorial.

Emotions and Reality

One of the first stops on your quest to get a handle on this should be the Q&A session Greg Sterling at SEL held with Microsoft SVP Yusuf Mehdi and Yahoo EVP Hilary Schneider.

The discussion covers a variety of questions, like an explanation of ‘premium search,’ the fate of BOSS and Searchmonkey, the status of Yahoo’s newspaper consortium, and what happens when the ten year relationship lapses.

Your second stop should be Danny’s own chronicles of Yahoo’s History, entitled A Search Eulogy For Yahoo:

Make no mistake, Yahoo’s out of the search game. I know the spin. Better user interface, new ways to innovate, a winning play. Let’s not kid ourselves. They’re done. Not today, not necessarily in a year, but down the line at some point. Done.

And it’s sad, because they were one of the originals. There was a time when the mighty Yahoo roared above all other search engines. When people were so worried about being listed in Yahoo that they pondered lawsuits over the issue, because not being in Yahoo was like not being on the internet at all.

Its not that we didn’t already know what was coming: a total freak-out, holy crap, Yahoo officially blew it in search! How could it be that the darling of the web is turning the out the lights around the most important feature of their business!?

I agree with Jason Calacanis, who has to be freaking out since he is running a human powered search engine.

It’s a a true duopoly – a specific type of oligopoly where only two producers exist in one market. In reality, this definition is generally used where only two firms have dominant control over a market like say Search. Note to Mahalo this isn’t good for you.

Third stop: let’s come back to our senses on that this is actually going to be ok and not earth shattering: Danny Sullivan explains the Microsoft-Yahoo Search Deal in Simplified Terms.

In historical context sure it’s a bummer for all of us who knew Yahoo back then. Start documenting all the areas that Microsoft and Yahoo need to work together on.

Our Angle: Who’s On the Mark and Who’s Hyperventilating

Paul Boutin just rewrote Jason Calacanis’ post into a short paragraph – well rewritten. Jason’s emotions right on but logic wrong. Of course it’s true what happened but that isn’t analysis of the deal and why it was great for both parties. Yahoo wins here people. They finally made a decision. What Paul points out (from Jason’s raging emotions) is that Yahoo never had a chance. Nice edit Paul.

Here is Paul Boutin’s edit:

“Yahoo was once the No. 1 search site on the Internet, but no one remembers now. That’s because the company farmed out its search engine, the core of its brand and largest source of its traffic, to upstart Google. Yahoo’s increasingly cluttered home page shooed Web users away to the faster, cleaner Google interface which delivered the same search results more quickly and effectively

Lets talk about Microsoft: Microsoft has a super-competitive culture. They live to destroy the competition. The Yahoo culture has been inclusive, accommodating, indecisive, never really uber-competitive.

Everyone is now where they want to be (or where they were always meant to be): Microsoft in a full-bore battle of the territorial predators with Google, and the old Yahoo quietly grazing in the nearby pasture.

Pathetic, really.

The old Yahoo has been dead for sometime. They never really stood a chance in this arena.

On a personal level I had the same feelings as Danny and Jason about the dying of the old Yahoo – the old Yahoo that had the swagger and top dog position. That is history. We have a new Yahoo one fighting for their life – with a major asset traffic, audience, and web apps. They needed to clean the slate and get focused on the future. I’m bullish now that they can focus with a new team.

Microsoft can surge when their troops are focused. Microsoft has won repeatedly from second place: originally MS/DOS was second to CPM, Excel was second to Lotus, Windows was second to Mac UI, IE was second to Netscape, etc.

They are not going to stop until they crush Google. It’s what they live for. It’s what defines the Microsoft culture.

How do you choke off Google’s air supply? Lock in distribution / advertising deals? Integrate Bing all over the Microsoft desktop clients? It’s an open area for speculation.

88% of ad reveneue for Yahoo is not such a bad deal in exchange for eliminating the search overhead. But the faster and deeper Yahoo cuts into the search division, the better their bottom line.

Beyond the Biggies: How Does it Affect the Rest of Us?

What is the impact to partners and developers: Everyone in the Yahoo search division might as well assume they will be out of work soon. In SiliconANGLE Labs we will immediately start moving to deploy the Bing API as a replacement for YAHOO! BOSS immediately. The writing is on the wall.

Yahoo will redeploy selected (as in 10-20%) of existing search engineers for search result page enhancement. That’s allowed by the deal. The focus will be on web apps and mobile. I expect they want to push in mobile where they still have some competitive advantage.

Microsoft/Yahoo at 30% market share v. Google at 70+% market share still poses a significant challenge for Microsoft. Next in play are Facebook and Twitter. Maybe Microsoft can buy enough more traffic to close the gap.

It’s an incredibly better deal for Microsoft than any of their earlier offers to Yahoo. Amazing move for Microsoft and still a great move for Yahoo. If the integration goes ok it’s a big win for both.