MicroHoo has arrived

It’s already been more than a year since Microsoft’s deal to outright acquire a Yahoo for a staggering $44.6 billion fell apart. But much speculation has remained as to whether or not the two companies would still end up working together in some capacity, with comments from executives on both sides adding fuel to the fire at different points.

Now, the focus is on Microsoft’s new search engine – Bing – becoming the search provider on Yahoo.com, which would combine to give the companies a more formidable rival to Google, at least in terms of market share and ad inventory. The deal would give Microsoft roughly 30 percent share of the online search market.

Yahoo would be allowed to sell search ads on Bing.com as well as its own site, giving it more search inventory to sell and making it a bigger player in the search sales front. It would also immediately be able to save millions by not having to maintain its own search infrastructure. The latest terms of the deal underscore Microsoft’s devotion to developing and owning technology vs. selling media.

In other words, Yahoo further cuts costs while opening up a big new revenue opportunity. And Microsoft finally becomes a serious player in search as a solid (but still distant) number two to Google.

[cb]Yahoo[/cb] [cb]Microsoft[/cb] [cb type=”product”]Bing[/cb]