The New York Times has a story this afternoon about how the market is interpreting the Yahoo-Microsoft search deal as a huge win for Microsoft and a loss for Yahoo. Yahoo’s stock fell 12% on Wednesday and another 3.6% on Thursday.

For those who don’t know, Microsoft rolled out a new search engine called Bing. It’s not perfect yet, but I’m a fan so far. I use it about half the time.

I haven’t used Yahoo Search for years. It just didn’t give me the results I wanted like Google did or Bing often does.

The way the deal is structured, Yahoo is basically selling its search business to Microsoft and using the Bing engine for search results. Rather than selling it for an upfront fee, they’re getting 88% of the revenue generated from search on Yahoo. This is a premium — these kinds of fees are usually in the 60s.

Frankly, this might be a good deal for Yahoo. Most tech guys will say, you have to own the technology or you lose what makes you unique as a company. That may well be true in this case, and some smart people have said it.

That being said, focus is important in a company. This deal lets Yahoo step back from trying to be a tech company and focus more on being an Internet media company and building on their #1 position there (Yahoo.com is still the most visited site on the Internet).

It’s hard to say where I come down on that. We’ll know soon enough.

I’m just wondering if they thought of structuring the deal differently. They each are contributing different things to the deal: Yahoo’s 20% market share and ad sales force, and Microsoft’s superior technology. What if you merged that together and ended up with Bing being owned 50-50 by both companies? Less guaranteed revenue for Yahoo, but more potential long term value.

I’ll tell you this: if the market thought Yahoo still owned a piece of the search asset, it’s stock wouldn’t be down since the deal’s announcement.

It will take a few years, but we’ll find out eventually whether the market was right or wrong. What do you think about this deal?