Yahoo, Microsoft can end search partnership as soon as October

by LP Green, II

If Yahoo Chief Executive Marissa Mayer remains uncomfortable with the company’s Web search agreement with Microsoft, she can terminate it as early as October.

That detail was included in disclosures Yahoo filed with regulators on Monday.

Yahoo and Microsoft last week announced a retooled search agreement that gave Yahoo more flexibility to sell its own search advertisements and generate its own search results. The two companies had struck a partnership in 2009 that made Microsoft’s Bing platform the search provider for desktop searches made on Yahoo sites. Mayer, Yahoo’s CEO since 2012, has been seeking alternatives to the 10-year agreement.

“What we like about this is it does offer us the ability to innovate more,” Mayer said on Tuesday on a quarterly earnings conference call when asked about the updated agreement. “We could work with other partners, we could introduce our own features.”

Previous filings said the agreement could be terminated by Yahoo if certain undisclosed performance targets weren’t met. Under the terms made public this week, both companies can opt to end the agreement from Oct. 1 with written notice. Should either party move to terminate the agreement, the deal would remain in force for a four-month transition period.

Yahoo also appears to have won from Microsoft a larger share of search revenue for queries made on Yahoo sites.

Under the original agreement, Yahoo received 88 percent of the advertising revenue generated by Yahoo sites. That share rose to 90 percent last month, and as of the updated agreement will total 93 percent, Yahoo said.

The revised formula also changes how payments to Yahoo affiliates are accounted for, yielding an agreement whose “underlying economic structure remains unchanged,” as Yahoo and Microsoft said in a press release last week.

Microsoft, the announcement last week revealed, will receive responsibility for major ad sales for Bing. Under the original agreement, Yahoo handled sales for ads displayed alongside both Bing and Yahoo results. ___

By Matt Day from Seattle Times

(c)2015 The Seattle Times
Visit The Seattle Times at
Distributed by Tribune Content Agency, LLC
Legally licensed through the NewsCred publisher network.

0 comment

You may also like