This week brought us a big news story in the online search world: Microsoft and Yahoo agreed to a 10-year search deal (pending approval). In case you missed it, here are some key takeaways from the announcement:

• Yahoo search will be powered by Bing – similar to AOL search being powered by Google.
• Yahoo search data will be available exclusively to Bing. Yahoo search data may be integrated into Bing-powered search platforms.
• Premium advertising for Yahoo and Bing will be offered by Yahoo. Self-Serve advertising for both sites will be offered by Bing.
• Earnings for Yahoo are estimated at $500 million per year with a savings on expenses of $250 million per year.
• Yahoo is expected to have more layoffs.
• The deal is still subject to regulatory approval and a strong opposition is expected from Microsoft. Approval is expected to take approximately 24 months.
• Bing will now be the #2 search engine and will have refined search algorithms as a result of the increased search behavior database.
• Microsoft will pay Yahoo 88% of search revenue generated on Yahoo search results pages for “traffic acquisition costs”
• Yahoo will focus (what’s left of) its technological innovation on other Yahoo products.
• “The agreement does not cover each company’s web properties and products, email, instant messaging, display advertising, or any other aspect of the companies’ businesses. In those areas, the companies will continue to compete vigorously.”

The general opinion of this agreement here at Web Ad.vantage is a pessimistic one.Yahoo has resorted to selling out. With Yahoo search pages now being labeled “Powered by Bing” it will give the sense that Yahoo is no longer its own entity. Furthermore, even though Microsoft and Yahoo plan to continue to compete and keep their other non-search products and services separate, it could potentially cause a backlash if Yahoo’s users are forced to switch to Microsoft ‘s version of these tools.

Microsoft and Yahoo claim that the merger will create “greater competition in search.” Our thought on that statement is a simple one: How does essentially removing a competitor from the market create “greater competition?” While Microsoft and Yahoo may be able to compete on a more even platform against Google, limiting a users choices does not create a better competitive market.

From an SEO standpoint, sites that have invested time and money into increasing their Yahoo rankings will be set back to square one if Microsoft eliminates Yahoo search. For SEO professionals, their nature of reporting may change all together. If the collaboration between Yahoo and Bing gains market share, SEOer’s will have to move away from focusing primarily on Google and begin to compare rankings for both engines.

It will be interesting to see what comes of this agreement and how Google will respond. We will certainly be keeping an eye on it.

Finally, we thought it would be fun to get everyone’s opinion on what they’d like the new name for this service to be. It’s common practice to create mashups when companies, (or even people!) are paired, and this should be no exception! So, on that note, we leave you with this poll: