Yahoo says Microsoft search providing 31 percent of revenues: Report

Yahoo says Microsoft search providing 31 percent of revenues: Report

Summary: Might the Microsoft-Yahoo partnership be more lucrative for Yahoo than its executives have been hinting?

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Bloomberg is reporting that a U.S. Securities and Exchange Commission (SEC) request has resulted in Yahoo disclosing on December 9 that 31 percent of its latest quarterly revenues are attributable to the search deal it forged with Microsoft.

yahoomicrosoft

As the December 10 Bloomberg report noted, that's substantially more than the 10 percent of sales Yahoo had publicly claimed that it was earning from the Microsoft pact.

A quick refresher: In July 2009, Microsoft and Yahoo signed a 10-year deal following Microsoft's decision against buying Yahoo for $45 billion, as it had hoped back in 2008. The 2009 deal specified that Microsoft would power Yahoo search, and Yahoo become the ad sales force for Microsoft's premium properties.

Over the past year, Yahoo has been seeking a way to get out of the deal, claiming the company hasn't found it financially lucrative. Yahoo CEO Marissa Meyer supposedly also has sought Microsoft's pending change in CEO as a possible loophole for getting out of the deal earlier than expected. As SearchEngineLand noted, there is a clause which would allow Yahoo to exit early from the partnership in 2015 if the revenue-per-share threshold vs. the market leader (Google) doesn't pass muster.

Microsoft, unsurprisingly, would like the Yahoo-Microsoft pact to continue on beyond its initial 10-year phase.

I've asked both Microsoft and Yahoo for comment on Bloomberg's report. A Microsoft spokesperson declined. No word back from Yahoo. So far, there's no sign of any new or updated Yahoo filing.

CNET reported recently that Yahoo may be building out some kind of new search/personalization technology, possibly in the hopes of relaunching itself as a search provider independent of Microsoft.

Topics: Microsoft, Emerging Tech, Google

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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7 comments
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  • Re: Microsoft's decision against buying Yahoo for $45 billion

    Really?

    Microsoft made an unsolicited bid to acquire Yahoo for US$44.6 billion, but Yahoo rejected the unsolicited bid.
    WhoRUKiddin
    • I believe that Yahoo's CEO is looking for a way

      to partner with Google, given that she came from Google, possibly as a backdoor for Google to partner to acquire Yahoo for themselves.

      If that is not possible due to Google's position in the search market, I would not be surprised to see a partnership signed that would be far more lucrative for Google then it would be for Yahoo.
      John Zern
      • Don't drag Google into this ..

        ... there was never any question of Google getting involved. I doubt they'd even be allowed to back-end Yahoo! search due to monopoly considerations.

        What is much more interesting is the possibility of Yahoo! re-entering search by itself. The company is very different now to the one Microsoft failed to buy: No way would they sign a punitive 10 year deal (no-one does in tech unless they are deperate), and I hope the '5 year break' gives them an out.

        There's plenty of search startup that Yahoo! could pick up for a song and build on - the question is, will Microsoft let them go?
        Heenan73
  • Dumping

    Yahoo can't wait to dump Bing so they can switch to Google's engine. Announcing just 10% instead of 31% is part of the proof. Next they'll complain that the search results aren't as accurate as Google
    Gisabun
    • Search results AREN'T as accurate as Google ...

      ... but that's not the point. Google wouldn't want to take it up, and would not be allowed to anyway. Yahoo! will likely go it alone ...
      Heenan73
  • Meyer looks at Google as a lover in the past that she can't forget and

    still feels in love with.

    So, she'll do and say anything to get back to her first love, Google.

    No doubt she'd like to get back to Google, but with Yahoo becoming part of Google, and she being named president and CEO of Google, and a position in the board of directors.

    No doubt, she's very ambitious, and nothing, not even the relationship between MS and Yahoo, will get in her way.
    adornoe
    • You're confusing Google and Microsoft

      Mayer isn't someone planted in Yahoo! like a Trojan Horse - that's a Microsoft trick. Have you forgotten Nokia already?

      Google don't want Yahoo! and they sure as hell don't NEED Yahoo! - and they never did (but I guess you don't remember that either?). And even if they did, the law would stop them.
      Heenan73