One of the interesting points of the Yahoo - Microsoft search deal from last year is that it only covered the US. International Yahoo properties had the liberty to choose other search providers. Yahoo Japan had even more liberties since Yahoo only controls a minority stake in the company. And the Japan outfit took advantage of that liberty to strike a deal with Google which could now become the default provider of both paid and organic search results.
Along with its second quarter financial results, Yahoo Japan also said it has entered an agreement with Google to power its search engine and search advertising network. There were few details on the deal and no deadline was issued. The deal is likely to face government scrutiny and is far from being finalized.
Google has also posted an
announcement on its Japan blog confirming the plans. Overall, the deal looks very similar to what Microsoft and Yahoo agreed to. Google will be providing the back-end search capabilities, but Yahoo Search will look and feel the same. The search ads will also be provided by Google, but Yahoo will handle the bigger accounts and other advertising options on the site.
Yahoo owns a 35 percent stake in Yahoo Japan, but the biggest share is owned by Softbank, the local communications and internet giant, with a stake of about 40 percent. It’s Softbank that pushed for a deal with Google.
Yahoo Japan has a 53 percent search market share in the country and is the leading provider. Google comes in a rather close second with a 38 percent share. Between the two, they basically control the market which is why the deal will likely face some scrutiny and may not be approved by the government.
Bing has about three percent of the Japanese search market. Microsoft is expected to fight the deal like it did when Yahoo and Google were in talks over a similar agreement in the US. Regulators blocked that deal and this may also happen in Japan.
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