Yahoo Will Greatly Benefit from Recent Amendment In Search Deal With Microsoft
According to an 8-K regulatory document filed by Yahoo on Monday, Yahoo Inc and Microsoft Corp have amended their search partnership agreement. The inclusion of a new termination clause is being considered in Yahoo’s larger business interest. This clause implies that both the companies can not step back from the agreement before Oct. 1, 2015.
Previously, as ZDNet observes, only viable situation for Marissa Mayer’s Internet company to end the deal was when certain revenue targets weren’t met. But now, above mentioned date onward, either party will have the freedom to break the partnership by giving a notice four months prior to the termination.
In addition to this, Yahoo has successfully created possibility to develop search capabilities of its own. Meaning, it has started finding a safe hut where it won’t have to entirely rely on Microsoft for algorithmic and paid search services.
Yahoo Inc explained in the filing:
Yahoo will now have the ability in response to queries on both personal computers and mobile to request algorithmic listings only, paid listings only or both algorithmic and paid listings from Microsoft. To the extent Yahoo requests algorithmic listings only or requests paid listings but elects not to display such paid listings, Yahoo will pay Microsoft serving costs but not a revenue share. In other cases and with respect to the Volume Commitment, Yahoo will pay Microsoft a revenue share.
The California-based tech firm has generated huge profits from its partnership with Microsoft. To be precise, one third of Yahoo’s total revenue came after success of this partnership.