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Yahoo, Microsoft Extend Talks in 10-Year Search Deal

Photo by Johannes Hemmerlein

Yahoo and Microsoft have agreed to extend their search negotiations for another 30 days as the two companies grapple to find a solution to their partnership woes.

Photo by Giorgio Montersino via Compfight cc  — Yahoo CEO Marissa Mayer at a public event.
Photo by Giorgio Montersino via Compfight cc
— Yahoo CEO Marissa Mayer at a public event.

Under that 10-year deal, which was first struck in 2009, it was agreed Microsoft’s Bing search engine would power searches across both companies’ Web properties.

The deal, which brings in 37 percent of Yahoo’s revenue, has caused friction between the two technology companies and that has not helped the ongoing talks.

The terms of the deal allowed Yahoo and Microsoft to re-examine it at its halfway point — which was in February — with 30 days set aside for negotiation. The companies, Yahoo revealed in a regulatory filing, have agreed to a new deadline of April 24.

Yahoo, in its filing, said: “[T]he Company, in addition to other termination rights, had the right to terminate the Search Agreement, during the 30-day period following Feb. 23 if the trailing 12-month average of the Company’s revenue per search in the United States (the “U.S. RPS”) on Yahoo Properties is less than a specified percentage of Google’s trailing 12-month estimated average U.S. RPS, excluding, in each case, mobile devices.”

Yahoo CEO Marissa Mayer has made no secret of the fact that she is not happy with the terms of the deal.

She has been focused on building Yahoo’s Web-search technology and ad sales in areas that don’t violate the agreement with Microsoft, such as mobile search. It is not known if Mayer will push to end the deal or simply revise it.

Neither Yahoo nor Microsoft were willing to comment on the matter.

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