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Microsoft and Yahoo to Partner For 10 Years

This just in from the world of the web. The search engine war heats up, or does it?

Microsoft and Yahoo made it official on Wednesday. The two companies announced a 10-year pact where Microsoft will power Yahoo search. Yahoo also becomes the sales force for Microsoft’s premium properties.

The companies said the search deal will accelerate innovation and bring more value to advertisers and Web users. Yahoo and Microsoft also get to focus on their core strengths. Yahoo CEO Carol Bartz says there will be “boatloads of value for our users and industry.” Microsoft CEO Steve Ballmer says the Yahoo deal gives Bing the scale to compete.

It’s inhumanly early in California, but it’s already a great day at Yahoo!. We’ve just signed a major search deal with Microsoft. Under the terms, Microsoft will become the search engine behind Yahoo! and we will become the worldwide exclusive relationship sales force for both companies’ premium search advertisers. — Yahoo CEO Carol Bartz

What does the Yahoo exec have to say about competing?

Better competition: Competition equals innovation. But with one player dominating 70% of search, that field has been pretty lopsided. This transaction will create a healthy competitor that’ll keep everyone on their toes.

The deal is not slated to close till early next year but both companies seem to exude confidence it will go through. But will the regulators go along with it? That remains to be seen. Surely Google is licking its chops at the chance to take on this consortium effort.

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