Last week, Microsoft and Yahoo came to an agreement to continue their Search Alliance partnership for the remaining 5 years of the original 10 year deal. Yahoo CEO Marissa Mayer thanked Microsoft CEO Satya Nadella for his help in rejuvenating the partnership. We now have the specifics on what has changed since the original agreement.
In Microsoft’s recent Securities and Exchange Commission (SEC) filing, the company revealed that the changes fall under three categories; ‘Services and Exclusivity’, ‘Revenue Share’, and ‘Terms and Termination’.
For Services and Exclusivity, the filing reveals that starting May 1st 2015, Yahoo can request paid search results from Bing for 51% of the search queries it receives that originate from personal computers accessing Yahoo websites. Yahoo also has the option to request only “algorithmic listings” from Bing, paid listings, or both. And should the company request paid listings and choose not display them, it will have to pay Microsoft the serving costs.
As for Revenue Share, where Yahoo was previously entitled to a Revenue Share Rate of 88% for the first 5 years of the deal, upped another 2% to 90% after February 23rd 2015, the new deal will have Yahoo receive 93% share of the revenue generated from Microsoft’s services on Yahoo online properties. That’s a rather large amount for Yahoo.
Finally, under Terms and Termination, the new deal will give both Microsoft and Yahoo rights to terminate this partnership on or after October 1st 2015. A written notice of termination from one party to the other is all it takes, following which the Search Agreement will terminate four months after.
While Yahoo does seem to benefit a great deal from this new agreement, Microsoft also gets a hold of a good deal of market share. According to StatCounter, US search share on Yahoo is at 10.6% as of April 2015, while Bing holds a slightly higher 12.5%. Let us know what you think of the search partnership as well as the updated terms in the comments below.