MS, Yahoo in deal to compete
Microsoft is launching its own search engine. Now it says it's making deals with Yahoo, its biggest rival in the search sector. What gives?
What gives?
Welcome to the Internet market, where these kinds of deals happen all the time. Direct competitors get together to cut deals, cement partnerships, and distribute content because they really need each other.
It's like mountain climbers racing toward the summit. They all may want to be first, but they know that if they don't help each other along the way nobody's going to get there at all.
"We're in a state of the market where 15 percent of the households go online," said Jeff Sanderson, general manager of marketing for Microsoft Network. "If we all do a better job getting [content]...the greatest benefit is going to be getting lots more people online. We're not at the point yet where we're fighting over some finite market."
Users, Sanderson explained, will have a choice between a directory--Yahoo--and an open Internet text search--Yukon, which will be powered by Inktomi. (See related story)
In exchange for featuring Yahoo to its audience, Microsoft's content properties will go before the considerable Yahoo audience. The popular directory will distribute news from MSNBC and car-buying information from CarPoint.
The deals are far from first and far from last. For instance, Microsoft's online magazine, Slate, recently has been landing agreements with all sorts of Microsoft competitors, including America Online and Netscape.
In addition, InfoSpace and DejaNews announced today that they cut a similar deal, where the two will integrate each other's services into their sites.