Bing, Bing, Bing!

Microsoft and Yahoo! have announced a 10-year partnership which will make Bing, Microsoft's new-ish search engine, the exclusive search tool for the Web portal. According to Reuters, "Yahoo estimated the deal will boost its annual operating income by about $500 million and yield capital expenditure savings of $200 million. Yahoo also expects the deal to boost annual operating cash flow by about $275 million."

Microsoft has had Yahoo! in its sights for a while. In February 2008, the software company proposed an acquisition, which raised anti-trust concerns before being scuttled.

At the time, The New York Times reported that Google was playing "the role of the spoiler," and for good reason: A combined Microsoft-Yahoo! (Microhoo!? Ya-soft?) poses a serious threat to the search behemoth. Much of today's reactions to the deal focus on how the new partnership will impact Google's market share. Advertising Age reported that Microsoft-Yahoo! will now control nearly 30 percent of the online ad business. Google still maintains 65 percent.

Ad Age's Michael Learmonth also notes, "The deal will take Yahoo out of the search-technology business so it can focus on media, marketing services and sales. Microsoft, especially if it can cede search sales duties to Yahoo, becomes more of a technology and infrastructure company, its disciplines better aligned with its strengths."