Microsoft-Yahoo alliance on verge of falling apart
28 Mar 2015
Yahoo and Microsoft have failed to make progress in their renegotiation of a 10-year search deal that was made by the former bosses of the two firms in an attempt to rival Google.
However, the two internet majors have failed to progress on renewal of their internet search deal, which was aimed at taking on Google.
They have extended the deadline to re-negotiate the deal by 30 days, signalling a possible break-up between them.
The partnership entered into in 2010 allowed Yahoo to use Microsoft Bing's search technology and search-based advertising system. The partnership was pioneered by Carol Bartz who was heading Yahoo with Microsoft chief Steve Ballmer.
The agreement included a provision for Yahoo to exit its search alliance with Microsoft within a 30-day period after 23 February, 2015, provided Yahoo's 12-month average revenue per search in the US was less than an undisclosed percentage of Google's estimated 12-month average revenue per search in the US.
In a regulatory filing, Yahoo said the companies amended the terms of the search alliance agreement, extending the time until late April to terminate the deal.
According to the initial agreement, the search alliance would remain in effect for another five years if there was no exercise of option to exit. Therefore, the extension could mean that Yahoo may be planning to opt out of the alliance.
Microsoft and Yahoo declined to comment on the negotiations.