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More Noise to Signal.

At its core, this agreement means that Yahoo has given up on its search engine business. Microsoft will be able to increase its market share in the search engine and search advertising market. Yahoo will receive revenue from Bing searches generated on Yahoo's sites and become "the exclusive worldwide relationship sales force for both companies' premium search advertisers." What remains to be seen, though, is what will happen to Yahoo's investments in interesting search technologies like BOSS and Search Monkey. Integrating these technologies, which are tied to Yahoo's search engine, could prove rather difficult for Microsoft. We will also have to wait and see what's going to happen to Yahoo's search APIs.

If anything, the Yahoo Search team will probably not be too happy to hear Yahoo suggest on its blog that Yahoo used to offer a "great" search experience but that Bing will offer an "awesome" one. In a call earlier this morning, Yahoo CEO Carol Bartz announced that some employees from the Yahoo search team will move to Microsoft, while others will move to the display business.

Creating Competition for Google

As we pointed out before, we think Bing is a worthy competitor to Google's search engine, which both Microsoft and Yahoo try not to mention in all their press materials but whose shadow obviously looms large over this deal. Advertisers aren't likely to spend a lot of money on a search engine that only commands less than 10% of the market, but once combined with Yahoo Search, Bing could easily reach 20% or more. At this point, advertising on Bing becomes far more interesting.

In a taped video statement Microsoft's CEO Steve Ballmer argues that the agreement will bring choice back to consumers (a Silverlight version is embedded below, a WMV version is available for download here). We can't help but note that consumers always had lots of choices with regards to search engines - in the past, most just didn't make the choice Ballmer would have preferred.

It's important to note, though, that neither Microsoft nor Yahoo seem to have worked out all the details of this deal, and that users won't see any changes before early 2010. The companies expect the agreement to be reviewed by industry and government regulators before this.

The Details

Here are the details of the search/ad pact between the two companies, according to this morning's press release:

• The term of the agreement is 10 years;
• Microsoft will acquire an exclusive 10 year license to Yahoo!'s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;
• Microsoft's Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.
• Yahoo! will become the exclusive worldwide relationship sales force for both companies' premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft's AdCenter platform, and prices for all search ads will continue to be set by AdCenter's automated auction process.
• Each company will maintain its own separate display advertising business and sales force.
• Yahoo! will innovate and "own" the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.
• Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!'s network of both owned and operated (O&O) and affiliate sites.
• Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!'s O&O sites during the first 5 years of the agreement.
• Yahoo! will continue to syndicate its existing search affiliate partnerships.
• Microsoft will guarantee Yahoo!'s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.
• At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.
• The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

Developers will now be able to build their own search engines using the Yahoo! index and search processing infrastructure via BOSS and include the semantic markup added to pages in both results parsing and the display of those results. There's considerable potential here for some really dazzling results.

Is anyone using Yahoo! BOSS yet? Anyone who will be able to leverage Search Monkey for a better experience right away? Yahoo is encouraging developers to tag their projects bossmashup in Delicious. As you can see for yourself, there are a number of interesting proofs of concept there but not a whole lot of products. Of the products that are there, very few seem terribly compelling to us so far.

We must admit that the most compelling BOSS implementation so far is over at the site of our competitors TechCrunch. Their new blog network search implementation of BOSS is beautiful - you can see easily, for example, that TechCrunch network blogs have used the word ReadWriteWeb 7 times in the last 6 months. (In case you were wondering.)

Speaking of TechCrunch, that site's Mark Hendrickson covered the Yahoo BOSS/Search Monkey announcement today as well, and having worked closely on the implementation there he's got an interesting perspective on it. He points out that the new pricing model, free up to 10,000 queries a day, will likely only impact a handful of big sites - not BOSS add-ons like TechCrunch search or smaller projects.

The other interesting part of the announcement is that BOSS developers will now be allowed to use 3rd party ads on their pages leveraging BOSS - not just Yahoo adds. That's hopeful.

Can Yahoo do it? Can these two projects brought together lead to awesome search mashups all over the web? We've had very high hopes in the past. Now the proof will be in the pudding.

It's still up for debate how much personal information you should share with others on your Facebook profile. Some people would argue that the time for us to hide behind our masks is over. If we're professional, good employees at work and good sons and daughters at home, it shouldn't matter so much if a friend tags us in a photo which shows us tipping back beers at the weekend party. The fact is, everyone has a personal life and it shouldn't matter who sees it.

Others would say that those are precisely the sorts of photos that make it dangerous to use online social networks like Facebook for both personal and business networking. "Don't friend the boss," they would argue. It's just too risky.

Sharing Some Things, Not Others

The issue isn't really that black and white, though. You may feel it's OK for your colleagues to see some of your Facebook photos (like those from the conference you attended), but not others (like those from the party). You also may be a little uncomfortable with the boss reading your wall posts, especially if your friends have an odd sense of humor at times.

If you're not ready to expose everything about you to anyone who asks to be your online friend, it's time you learned how to use Facebook's friend lists.

A little over a year ago, Facebook launched a new feature called "Friend Lists." With lists, you can create groups of friends on Facebook, separating work from family and close friends. It's simple to use, but it's definitely an underutilized feature. In fact, most of the people who spend their days "Facebooking," never seem to take the time to worry about who's seeing what...until it's too late.

But now, as more older generations are going online and joining social networks, the "Should I Friend Mom/Dad/Boss?" issue is becoming more prevalent than ever.

How To Use Friend Lists

To get started with Facebook Lists, you first need to build one. You can do this from your Friends page. (Click "Friends" in the blue bar at the top). On the left side of the page, click the button "Make a New List." Give it a title.

Now you'll have the option to add your friends to the list. You can either start typing in names one by one or click on "Select Multiple Friends" to add several people to the list all at once. (To add people, just click on their photos.) When you're finished, click the "Save List" button at the bottom.

Once you have some lists created, it's time to figure out who gets to see what. To edit your privacy settings, go to "Settings" at the top-right of the screen next to the search box. When you hover your mouse over the link, you'll see a menu appear; click "Privacy Settings"on this menu. On the following page, click "Profile," the top choice in the list of options.

On the profile privacy page, you have the option of customizing exactly who gets to see what. You can modify the following areas: Profile, Basic Info, Personal Info, Status Updates, Photos Tagged of You, Videos Tagged of You, Friends, Wall Posts, Education Info, and Work Info. If you're unsure of what any of those things are, click the "?" next to the item to read a definition.

Using the drop-down boxes, you can customize who gets to see your info: "Only Friends," "Friends of Friends," or "My Network of Friends." To lock down your profile to friends only, you could set all these to "only friends." But since you have now created specialized lists, you'll want to use these instead.

To do so, click the fourth option from the drop-down box: "Customize." From here, you can add lists of people who should NOT be able to see this part of your profile. For example, if you wanted to block a list of work colleagues or those in your family from seeing your status updates, you could do so here - just type the name of your list in the box "Except these people" and save your changes.

Note: you can also block certain people individually just by typing in their names, but given the ever-growing number of Facebook users, you're probably going to need a Friend List at some point. We recommend biting the bullet and creating your lists now instead of treating everyone as a one-off. 

After you've saved your changes, you're done. You'll have your privacy back without having to change the way you and your friends use Facebook. Of course, keep in mind that nothing is foolproof - determined hackers can gain access to your account as can anyone who guesses your password....so maybe you shouldn't use your dog's name.

When lists are finally in place, you can assign new friends to a list right when you're accepting their friend request - just look for the option "Add to Friend List" before you click "Accept."

It may seem like quite a bit of work to set up, but you'll thank yourself for doing this later...like every Monday morning when you go back to work after a great weekend...or the next time you need to borrow money from mom and dad. You get the idea. Better safe than sorry.

The default search engine for Inqisitor is obviously Yahoo's own product, but you can also switch to Google as your default search provider. While Flickr and Wikipedia are already built into the plugin by default, Inquisitor also allows you to add shortcuts to any other search engine to its repertoire.

Personalization

In this new version, Yahoo has also started to personalize the results based on your previous search behavior.

In our tests, the personalization seemed to work quite well, though it takes a few searches before the plugin learns enough about your behavior to become useful.

The plugin can now also analyze your bookmarks and include them in your searches. This is useful, but modern browsers like Firefox 3 and Chrome already include this functionality in their own address bars now and can display their results a bit faster than Inquisitor.

In the future, we assume that this functionality is going to become a standard browser feature, but if you are looking to enhance your search box now (and especially if you are using Internet Explorer), this plugin is definitely worth a try.

Not Pretty - But it Works

PopGist is not much to look at. Neither its Google inspired logo nor the bland presentation of its search results immediately instilled a feeling of confidence in us. If you can look past that, however, the search results themselves are very useful.

If you search for Google Chrome, for example, PopGist will return reviews from most major blogs as well. If you look for a company, PopGist will also include links to profiles on services like TradeVibes in the results. At its best, PopGist can become a one-stop search engine for researching a company or a product and safe you a lot of time and energy, as you won't have to try multiple search queries to get relevant results.

Services like PopGist tend to be prone to being overrun by spam, but surprisingly, PopGist's results always came back very clean. In our tests, PopGist usually returned the best results when entering relatively simple queries and the most useful discussion sections were always clustered around the top three results.

Overall, we were impressed with PopGist's results. While it surely won't replace Google for us, its search results allow us to get a quick glance at a product in its context without having to use various services.

Unfortunately for Cuil, this could be a great opportunity for Yahoo BOSS (Build Your Own Search Service) to shine.

Cuil clearly understand that this is a scale game. You have to search as much if not more than the competition. Thus their PR about “the world’s biggest search engine”. For a start-up to compete on scale right out of the box is strategically…weird is the word that comes to mind. Particularly if you don’t have some disruptive technology that changes the economics. They understood the need, PR delivered, execution failed. They must have known it would fail. Surely?

Let me try this pitch on the next VC I meet. “To win we have to be as big as Google, Yahoo and Microsoft the day we launch, if not we don’t get any adoption”. I don’t think I would get the check, but maybe I don’t have the magic touch.

Enter BOSS

Why is this a big opportunity for Yahoo BOSS? Yahoo already has the scale in crawling and indexing. They already find those “obscure” searches that Cuil missed. The cool stuff on Cuil, the 3 panes and the Explore by Category, can be built by self-funded start-ups in their garage. These will probably be vertical, it will be search embedded into other apps. It is search as infrastructure. Come on Yahoo, you have Icahn off you back, make this work!

Partner Relationships

Websites wishing to leverage the BOSS APIs will be allowed to can blend in their own ranking input and change the presentation of results. There are no requirements for attribution to Yahoo! and there's no limit on the number of queries that can be performed.

At launch Yahoo! BOSS will see live integrations with at least three other companies. Hakia will integrate their semantic parsing with the Yahoo! index and search, social browser plug-in Me.dium will use the data it's collected to offer a social search tied to the Yahoo! index, and real-time sentiment search engine Summize was included in the BOSS demo - augmenting Yahoo News search results with related Twitter messages.

More extensive customization and integration with large media companies will be performed with assistance from Yahoo! and ad-free access to the APIs will be made available to the Computer Science departments of academic institutions.

Does Anyone Really Care About Niche Vertical Search Engines?

We asked Yahoo! just that, although we believe that alternative search engines can be pretty exciting. None the less, we think it's a valid question.

Senior Director of the Open Search Platform, Bill Michels told us that niche search engines often aren't very good because they have access to a very limited index of content. It's expensive to index the whole web. Likewise, Michels said that there are a substantial number of large organizations that have a huge amount of content but don't have world-class search technology.

In both cases, Yahoo! BOSS is intended to level the playing field and blow the Big 3 wide open. We agree that it's very exciting to imagine thousands of new Yahoo! powered niche search engines proliferating. Could Yahoo! plus the respective strengths and communities of all these new players challenge Google? We think they could.

What's Not Included?

The BOSS APIs are in beta for now, so they may be expanded with time - but for now there are still a few crown jewels in the company's plans that won't be opened up. We asked about Yahoo's indexing of the semantic web and were told that would not be a part of BOSS. We asked about the Inbox 2.0 strategy and the company's plans to rewire for social graph and data portability paradigms. We were told that those were "other programs."

We hope that there's not a fundamental disconnect there that will lead to lost opportunities and a lack of focus. It is clear, though, that BOSS falls well within the company's overall technical strategy of openness. When it comes to web standards, openness and support for the ecosystem of innovation - there may be no other major vendor online as strong as Yahoo! is today. These are times of openness, where some believe that no single vendor's technology and genius alone can match the creativity of an empowered open market of developers. Yahoo! is positioning itself as leader of this movement.

Let's see what they can do with an army of Yahoo! powered search engines. Let the games begin!