Yahoo and Microsoft’s Bing Becomes Two-Headed Google Nibbler. Armstrong Naps..

Reuters reports that a recent Microsoft/Yahoo deal will attempt to rival Google. Here’s a video report (thanks Jan).

Yahoo agreed to the ten year deal (which brought its share price down according to CNN Money), but doesn’t get any insta-cash. PCWorld thinks Bing’s interface and marketing campaign (which eroded Yahoo’s share of the search market) helped Microsoft secure the exclusive revenue-share deal.

PCWorld furthermore pronounced Yahoo Search RIP. Aww. It’s like Google video’s demise after the YouTube purchase. We’ll miss it even if we forgot it existed. Does Yahoo now join the list of defunct search engines on this wikipedia page? Who dares etch its name on the tomb?

CNet proclaims the deal “will turn Microsoft into the second-largest search company in the world, and turn Yahoo into a media-driven advertising broker.” The CNet report provides an excellent summary of pros/cons for Microsoft, Yahoo, Google, Consumers and Advertisers.

For instance, Yahoo search revenue is now tied to the fate of Bing for a decade, an “eternity in the Internet world.” Microsoft loses relationships with advertisers on search ads (the big revenue maker still), although it preserves its display ad sales operation for now. Banners are going to be hawt in the 2010s.

But if you ask me (and most don’t) I’ll say Yahoo and Microsoft probably cut the deal on that timeless rationale called “the enemy of my enemy is my friend.”

I’m digging the Bing television campaign, but I haven’t found the search engine as efficient or accurate as Google. Of course I make that judgment primarily on “ego searches” since I know what, theoretically, should appear when someone is searching Nalts, Nalts videos, Naltz, Nalty, or Nalts Consulting. Bing is smarter in just a few cases, but not nearly enough to divert my own search habits. Make one default on Mac or Office, though, and you’ve got something that has a chance. My former boss used Microsoft’s paperclip/dog help cartoon to search the web. Not kidding.

I also just experimented with a few dozen searches for an odd medical symptom I just uncovered an hour ago (don’t ask- it’s definitely TMI) and found Google beat Bing for relevant, credible, and informative health content. Naturally, I’m biased. I get a check from the search monster each month (YouTube ad sharing). An example of a Bing advantage, however, is available if you click Google or Bing hyperlinks early in this paragraph. You’ll see that Bing knows exactly what you’re after when you search Google, but Google gives you 54 million options for a search for Bing.

Don’t forget this, however. When you have about 60-80% of the global search-engine market share (see search engine share trend by month or read this nice analysis of search-engine milestones in the past 5 years), you’ve got a simple cause/effect advantage. The share dominance is the effect of consumer-friendly algorithms, and the cause of improved search results (as volume makes the engines learn faster).

Speaking of fast, this deal by most accounts won’t be fast. So there’s still time for Tim Armstrong to do something desperate and odd to keep AOL in the game. My friends in Google sales are chuckling at that statement, but still enchanted by the pied piper tunes from the guy who protected the sales folks from those pesky engineers. And it’s too early to blame Armstrong on a 21 percent AOL decline last quarter.