Microsoft deal: What will happen to Yahoo's search employees?

Yahoo Chief Executive Carol Bartz has admitted there will be redundancies as part of the new tie-up with Microsoft.

Speaking on a conference call, Bartz revealed: "There are search employees who will be asked to take jobs at Microsoft [as part of the search team]."

She also explained some would be moved within Yahoo to help in other areas of the firm in order to help with job retention.

"Unfortunately there will be some redundancies within Yahoo," she said. "But this transition will take place over two and a half years, and nothing will change until regulatory approval, hopefully in early 2010.

"It [the deal] will then go on over the next 24 months, although we'd hope it will be sooner, though there will be redundancies here."

Google opposition

Steve Ballmer, Microsoft CEO, said he believed there could be some opposition from Google (who he only referred to as the 'main competitor' during the call, apart from one slip):

"In terms of opposition, there could be some from the main competitor. It's one of those cases as the two of us come together, there will be more competition, and Google is going to be aggressive.

"But we think we have a good case on improving competition in the market if we're called upon to make that case in Washington DC and Brussels."

Search alternative

"The deal will create a significantly competitive alternative in search," Ballmer added.

The duo also revealed Yahoo will keep 88 per cent of the revenue from search ad sales on its site for the first five years of the deal, and believe the deal will save $200 million a year for Yahoo, with cash flow increased to $225 million per year before re-investment.

Microsoft will pump $200 million into the transitional period where it absorbs Yahoo's search, but is confident the improved scope will help improve profit in the coming years (unsurprisingly).