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Yahoo and Microsoft amend 10 year search partnership

Yahoo and Microsoft amend 10 year search partnership

by AshwinApril 17, 2015

Yahoo and Microsoft have announced that they are amending their 10 year search partnership.

The new agreement however, will favour Yahoo considerably.

As per the old agreement signed five years ago, Yahoo had to use search results and ads from Microsoft Bing for all desktop searches. It wasn’t so for mobile platforms, for which it could use any service. According to the new deal,  Yahoo is no longer required to use Bing Search Results and Ads on either desktops or mobiles.

Now that Microsoft has lost exclusivity, Yahoo could focus on using its own ad platform for desktops. But it said that it will continue to serve Bing Ads for the majority of its search traffic from desktops.

The New York Times reports that Yahoo made about $1.8 Billion, about 35% of its revenue last year’s solely from search. And Microsoft paid around Yahoo 90% of the revenue it made from ads it served on Yahoo Search results. This will continue to exist, as part of the agreement.

The major change in the new deal is how ad sales are handled. Both parties will take over ads delivered by their own advertising platforms. Microsoft will take over all ad sales of Bing, while Yahoo will sell ads using Gemini, its own ad platform.

The two companies were negotiating over a new deal for the past few months, with CEOs of both companies being involved in the negotiations personally.

Microsoft CEO, Satya Nadella said:

“Our global partnership with Yahoo has benefited our shared customers over the past five years and I look forward to building on what we’ve already accomplished together. Our partnership with Yahoo is one example of the diverse partnerships we’ll continue to cultivate in order to have the greatest impact for our customers.”

Marissa Mayer, Yahoo’s CEO:

“Over the past few months, Satya and I have worked closely together to establish a revised search agreement that allows us to enhance our user experience and innovate more in our search business. This renewed agreement opens up significant opportunities in our partnership that I’m very excited to explore.”

Things aren’t looking good for Google. Earlier this week, the European Union charged it for Antitrust violations, for abusing it’s dominance in search results to favour its’ own portal over other one. And now an analysis conducted by research firm comScore, in March, shows that its rivals are gaining on its foothold.

The report says that 12.7% of users in the U.S conducted searches on Yahoo, while Bing impressed with 20% of searches. The majority of searches made was dominated by Google, with the Mountain View company holding the lion’s share of 64.4%.