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Microsoft extends Yahoo's Revenue per Search Agreement for US

Microsoft gives another year guarantee to Yahoo for revenue per search but only for U.S. and Canada. Yahoo is actually not very happy with this web-search partnership. Yahoo CEO has some private discussions with Microsoft CEO to end the contract, yet declined to comment on it.

May 8 2013, 4:22am CDT | by

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Microsoft extends Yahoo's Revenue per Search Agreement for US

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Microsoft extends Yahoo's Revenue per Search Agreement for US

Yahoo has received guarantee for another year from Microsoft corporation to provide revenue per share in US. The extension will end in April 1 of next year. The financial statistics of Yahoo are facing tough challenges in various international markets. These are exposed in Q10 report of U.S. Securities and Exchange Commission. U.S. revenue-per-search guarantee, which had expired on March 31, will be extended for one year, and took effect on April 1, Yahoo said in its 10Q filing with the Securities and Exchange Commission on Tuesday.

Yahoo! Inc. in China is growing on fast pace in form of AliBaba Group according to Reuters . It has 24 percent share and company growing on 80% per year basis. The recorded asset value was $1.84 billion in 2012. Yahoo Japan curved up with 13% preserving $343 million at the end of year 2012. Silicon Valley companies Google, Yahoo and Microsoft are standing each other in search engine fight. Players are trying to switch sides but every time, Google wins the game.

The agreement between Yahoo and Microsoft was signed for 10 years. It was signed between CEOs of two companies Steve Ballmer and Marissa Meyer. Under this Microsoft will user search features of Yahoo! On it products and will give revenue per share. It also covers to increase monetization possibility by joining hands in hand against Google.

Yahoo CEO Marissa Mayer has commented on this agreement last year that "adding that Microsoft has indicated it wasn't interested in doing so" as reported in Wall Street Journal . She reportedly did some private discussion to come out of the agreement with Microsoft. But Yahoo representative gives no comments on this discussion while stating after the extension that Yahoo will surely work as a team with Microsoft as it is an important partner. Also the Microsoft representative said that company is "working closely with Yahoo to further strengthen our partnership and deliver real choice and value to advertisers and consumers."

Microsoft will provide technology benefits to Yahoo which will share search data in result. The main search engine would be Bing on front end. It will give increase revenue from improved search. And for Yahoo the agreement was about to save lot of technological investments.

Under the agreement, Microsoft will receive 12% revenue share out of Yahoo Search Ads response. The transition is very tough in the start with lot of hurdles to cover so Microsoft agreed to share certain extra revenue per share for Yahoo. The average amount is approximately $12-$15 million for each financial quarter according to Jordan Rohan, official business analyst of Stifel Nicholas & Co.

The projected search engine response was very low than expected. The joint venture of both companies could not move Google search users to Bing or Yahoo. And in United States, Google is the biggest search engine company. After joint venture, its revenue has suddenly declines year by year. After Q10 report, it is clear that new strategies are required to be implemented by CEO Marissa Meyer to boost the declining money curve.

Image Credit: Getty Images


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<a href="/latest_stories/all/all/20" rel="author">Sumayah Aamir</a>
Sumayah Aamir (Google+) has deep experience in analyzing the latest trends.




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