The much anticipated deal between Mircosoft and Yahoo has finally reached an agreement - Yahoo gave up search.

Microsoft and Yahoo has inked a 10 year deal to challenge Google’s dominance in online search. Under the 10 year deal, Yahoo.com and Bing.com will maintain their own branding but search results on Yahoo will be powered by Bing. As for Yahoo, they will be responsible to attract premium advertisers.

Yahoo estimated the deal will boost their annual operating income by about US$500 million and yield capital expenditure savings of US$200 million. Yahoo also expects the deal to boost annual operating cash flow by about US$275 million.

Also, Microsoft will pay Yahoo 88% of the revenue it gains from searches on Yahoo’s sites. Microsoft will also have the rights to integrate Yahoo’s search technology into its own existing search platforms.

For more details on the terms of the 10 year deal, you can visit the microsite created by Microsoft about the deal.

So what this means to SEO optimizers and pay-per-click advertisers?

The integration of Bing and Yahoo search algorithm will take some time and they estimate it will be done in 2010. So optimizers and advertisers have ample time to prepare. For SEO, I believe the algorithm will not vary too much. As long as we continue to write good content, we should not be affected by the integration of Bing and Yahoo. In fact, this will be beneficial to the consumers. Instead of one strong number one and 2 weak number two and three in the past, now we will have a strong number two.

As for PPC, MSN Adcenter will be the only platform that we will access to manage both ads on Yahoo and Bing. As long as adcenter improves on its user-friendliness, there should not be a big problem.

So it’s final… the long anticipated deal is finally done. Now, what will Google do?

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