It’s really hard to predict how a 10-year agreement will work out in the first week, but after reading the official press release, several articles from Danny Sullivan, and dissecting what Bartz & Ballmer (Yahoo & Microsoft CEO’s) are saying, we can safely make a few predictions as to what the future holds for search engine marketers.

Organic Search:

“Bing.com is going to take over as the exclusive algorithmic search engine for Yahoo!”
-MSN Press Release

For SEO’s out there, this means your world just got a little smaller. Google & Bing are now the two primary search engines to focus on in terms of improving keyword rankings. Combined Google & Bing Results will control over 90% of search engine market share.

Yahoo is giving Bing all of its 19.6% of market share to add to Bing’s growing 8.4%. Combined these two engines will control roughly 28% of search. Google will remain dominate with 65% of the search market share.

Yahoo Changes:

Let’s rewind the clock a few days when Yahoo updated its home page. This was mainly a cosmetic change, but some underlying agendas were definitely in play as well.

Yahoo wants to gain traffic by not being just a search engine, but a gateway to many portals. One of the best things Carol Bartz has done for Yahoo in her tenure is focusing on the things Yahoo is good at. This means all the websites and portals Yahoo owns that are not search engine related.

Bartz may be a little too eager to step away from the Google competition rhetoric to a fault. Last week she was quoted as saying Yahoo “is not a search company”. Anyone who can remember a Yahoo! commercial before 2004 knows differently; however if you read between the lines, you can see what she is trying to accomplish moving forward.

Yahoo attracts millions of visitors via properties such as Flickr, Answers, Health, Travel, Shine, etc. Don’t expect these sites to go away anytime soon!! If anything Yahoo will look to capitalize on these. In fact, last week we saw twitter integration and better search functionality given to Flickr.

The recent changes in Yahoo home page and other properties are optimizations to make these sites “destination sites.” Their success with this endeavor is still TBD and thus the SEO pursuit is going to be based on traffic over the years. If Yahoo properties stay strong in direct traffic, as well as search engine rankings, then expect SEO’s to pay attention.
Pay Per Click & Banner Advertising:

Yahoo is out of the search business but not completely out of the advertising business via search. Reports indicate that Yahoo will retain 88% of ad revenues generated from their sites. This is a win –win for both Bing and Yahoo considering the amount of overhead Yahoo is spending to service their clients and maintain the Panama system.

It appears that Yahoo wants to keep and grow the revenues via search and their properties and dump the overhead.  One interesting point in the agreement is that Microsoft will hire 400 Yahoo employees and an additional 150 to help during the transition process. If this produces the anticipated $500 million in extra annual operating profits then shareholders will be excited.

With revenues from Yahoo search *powered by Bing* bringing 88% in you can bet that Yahoo will try to focus on banner advertising on their web properties that don’t require them giving 12% back to Microsoft.