Microsoft and Yahoo have thrown the switch on the main part of their search agreement, struck last year, under which Yahoo agreed to farm out search queries on its Web site to Microsoft's Bing engine.
The companies said Bing search results went live on Yahoo on Tuesday. "This is a great milestone for Bing and Yahoo and our customers," wrote Satya Nadella, senior VP for Microsoft's Online Services unit, in a blog post.
"We are happy to report the transition has gone smoothly and we feel great about the progress our search alliance has been making over the summer," said Nadella.
The integration is thus far complete only in the U.S. and Canada, with other countries to follow.
Yahoo also plans to adopt Microsoft's adCenter as its online advertising platform. Nadella said that work should be complete in the fall. "As we have said all along, our primary goal is to provide advertisers with a quality transition experience in 2010, while being mindful of the holiday season," Nadella wrote.
Microsoft and Yahoo announced the deal on July 29, 2009. Under the ten-year pact, Microsoft will place its Bing search engine on all Yahoo sites and, initially, keep 12% of the revenue from Yahoo-driven searches. Yahoo will handle sales and marketing for premium search ads for both its own properties and Microsoft's.
Also, Microsoft agreed to hire a minimum of 400 Yahoo employees on a full-time basis as it extends Bing to Yahoo's Web sites. It also agreed to hire an additional 150 Yahoo workers to help with the transition.
Yahoo can terminate the arrangement if search traffic generated by the alliance falls below a specified percentage of rival Google's traffic. Yahoo also retains the right to expand the partnership by adding Microsoft's mapping and mobile search services to its Web properties.
Microsoft must submit to Yahoo copies of all data it collects from its sites while providing search services, according to SEC documents filed by the companies.
Yahoo CEO Carol Bartz has said that, by in effect outsourcing search to Microsoft, her company can save $200 million in annual capital expenditures through reduced spending on search-related operations.