Yahoo, Microsoft finalize search agreement

By on December 7, 2009, 11:29 AM
Earlier this year, after a failed merger attempt and months of back and forth negotiations, Microsoft and Yahoo officially announced a search deal intended to help them compete more effectively with Google. The companies had hoped to have the details worked out by late October, and after a brief delay they've now "finalized and executed the definitive Search and Advertising Services and Sales Agreement and License Agreement."

Under the 10-year deal, Microsoft's Bing search engine will power Yahoo's search results maintaining its own interface but featuring the "Powered by Bing' branding. In return, Yahoo will provide premium search-advertising services for both companies and keep 88% of the revenue generated on its properties for the first five years. For the remaining period the company would retain 93% of revenue earned.

Although apparently no upfront payment will be made, Yahoo is counting on the deal to help it significantly cut costs, while Microsoft sees it as an opportunity to increase its web search market share. The partnership is still being reviewed by antitrust regulators but the companies hope it will close in early 2010.

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