Yahoo Retains the Right to Break With Microsoft

Aug 5 2009, 1:40pm CDT | by Robert Evans

When news of the partnership between ailing search giant Yahoo and Microsoft was first announced, both companies presented a fairly united front. Now, however, more details about the partnership have emerged. This new information paints a somewhat different picture of the relationship between both companies.

According to eWeek Yahoo still retains the right to split with Microsoft if the US revenue-per-search-query (RPS) rate for both companies drops below Google's. This means that if Microsoft can't 'bing' home the bacon, Yahoo can split and take their market share with them. After 5 years, the deal gets even better for Yahoo. They can pull out if just their RPS drops below Google's.

There are other provisions as well. If Microsoft decides to back out of the search business or sell their search assets, Yahoo gets right of first refusal. Both companies can also still nix the deal if they don't iron out all of the fine details by July 29, 2010.

This news doesn't really reveal anything other than that Yahoo and Microsoft are both prudent companies who realize that Bing is still perfectly capable of failure. Both corporations are girding their loins for an intense battle with the world search leader, but it isn't going to be an easy fight for either of them. If Bing stops being profitable (although, to be honest, Microsoft still hasn't made a penny off of it) they'll need to be able to drop it before it drags both of them down.

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Robert Evans
The excitement about new smartphones, tablets and anything mobile drive Robert to unearth the latest rumors and developments in this fast moving space. He adopted 4G as soon as it become available and knows where the mobile market is going.
Robert can be contacted directly at robert@i4u.com.