Yesterday after the Microsoft and Yahoo! deal was announced, Yahoo!’s market cap dropped about $2.9 billion and Microsoft’s market cap jumped about $2.9 billion. The coincidence of this occurence taking place was uncanny. Even Ballmer was shocked that Yahoo!’s stock took a hit. “Nobody gets it,” stated Ballmer when talking to financial analysts at Microsoft headquarters yesterday.
Microsoft and Yahoo! announced a pact on Wednesday that would last 10 years. This deal is considered to be a blow to Google because Yahoo! will be focusing less on search technology. Instead Microsoft will handle the advertising revenue and search technology on behalf of themselves and Yahoo! Google on the other hand will have less competition to worry about.
Yahoo!’s homepage and their various other properties will be powered by Microsoft search engine Bing.com. Yahoo! will be keeping the majority of the revenue earned by ads on the Yahoo! websites. ?I was myself kind of surprised by the market reaction,? stated Ballmer. ?It?s a win-win deal.?