Yahoo's Mayer fails in effort to end Microsoft search pact

Yahoo's Mayer fails in effort to end Microsoft search pact

Summary: Efforts to end a venture less successful than expected have failed, according to reports.

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Marissa Mayer has failed in attempts to end a 10-year search pact between Yahoo and Microsoft.

According to Bloomberg, in light of the Yahoo CEO Marissa Mayer's plans to make Yahoo mobility-focused, Mayer has been eyeing a potential deal with Google -- but contractual restraints due to the firm's deal with Microsoft may have scuppered these hopes.

Citing people familiar with the matter, the publication reports that Mayer attempted to end the search pact between Microsoft and Yahoo soon after taking up her new role. However, Mayer has been met with resistance from Microsoft CEO Steve Ballmer.

In February, Mayer admitted that the 10-year agreement has not resulted in either the market share or revenue that Yahoo wanted to achieve. The collaborative search effort -- where Microsoft provides the technology for Yahoo searches -- was hoped to eventually become a competitor for Google's search facility.

The pact expires in 2020.

Mayer has said that the companies want to "collectively want to grow share rather than just trading share with each other," and at a technology conference this week, said that both firms were currently "happy with the relationship."

As a way of keeping Yahoo content three years after the pact was reached, Microsoft has recently agreed to continue paying Yahoo a guarantee for the revenue-per-search (RPS) shortfall that persists. The guarantee, which makes sure that Yahoo earns a specific level of profit no matter what happens, was meant to expire on March 31, but the Redmond giant and Yahoo will carry on the stipulation for at least one more year.

Microsoft's AdCenter technology delivers and purchases online advertising, but has not been as popular or lucrative as expected.

Reports suggest that Mayer has met with representatives of rival firm Google, and has agreed on an alternative search deal should the collaboration with Microsoft end. Either firm can terminate the deal in 2015, or if Microsoft sells or closes its Bing search engine.

Marissa Mayer has placed mobile development at the top of Yahoo's priority list. The CEO, who took over last year, has said she wishes to focus on the everyday habits of device users. Yahoo currently has 200 million monthly active mobile users, and the tech giant's app portfolio has between 60 and 75 mobile apps -- although this number of applications is expected to dwindle as operations are streamlined.

Topics: Mobility, Tech Industry

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33 comments
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  • So many ways this could go...

    But Microsoft being what it is will stick to Yahoo like a gooy band-aid until the bitter end to keep Yahoo away from Google.
    DancesWithTrolls
    • It actually should be

      a conflict of interests for Yahoo seeing how Mayer is a former Google exec. I'm surprised she hasn't tried to just outright sell Yahoo to Google.
      Azzras
      • Getting in Bed with Google is like being sold to Google

        without the profits.
        William Farrel
        • Did you

          think the same when Elop went to Nokia and made the bed with Microsoft?

          When will this shills learn that whatever Microsoft touches, it breaks?
          czorrilla
  • What?

    A former Google exec trying to move Yahoo to Google? Say it ain't so.
    Azzras
  • Boo freakin' hoo..

    Sorry if the honeymoon is over at Yahoo! Melissa.. Microsoft has always been a highly successful company, Yahoo! hasn't been successful since 1999. You're not working on the Gmail team anymore, so suck it up through a crazy straw and deal with what you got, stop blaming Microsoft for all your problems, you're starting to sound like Obama blaming Bush his first two years in office.
    charlesdjones1
  • One trick pony?

    People who know how to use a screw driver try to use a screw driver to fix every problem. Maybe this direction is coming from the board and they hired her to get Yahoo? closer to Google in the first place. But if this is her idea, shows shallowness in ability, IMHO.

    Not a Mayer fan so I am bias.
    Rann Xeroxx
  • Yahoo's Mayer fails in effort to end Microsoft search pact

    Yahoo has itself to blame. Their new homepage sucks and is driving people away from it. No views means no searches and no ad revenue. If they learned how to improve their site they would see the benefits of using Microsoft Bing for their search.
    Loverock-Davidson
    • Yep. MS screwed them over really well.

      That was obvious when they started using Bing instead of their own search. It had nothing to do with how the site looked, but everything with the search capability.

      I used to use Yahoo for everything... but then they slacked off the engineering used for their search, and google got ahead.

      MS just bought the remaining customers, and because of the sucky Bing, yahoo went into the toilet.
      jessepollard
      • Yahoo was in the toilet years before Bing came along to rescue them.

        So, get your history straight, and then come back to, hopefully, comment more intelligently.
        adornoe
        • What frigging rescue?

          Bing is B.S, and Yahoo knew it. The problem is that a pact with Microsoft is a pact with the devil.
          czorrilla
      • It couldn't be that Yahoo...

        ...hasn't updated their sites in a meaningful way since they started, now could it?

        In my opinion, bing is a superior search experience to Google. But even if I felt differently, I still wouldn't use Yahoo simply because of their site design.

        I've not used Yahoo in years other than a periodic check to see if it's any better, and it's not. So I go elsewhere.
        jmagzdnet
  • .

    She sure looks happy about it.
    lizardspock23@...
  • Photo mismatch

    "Smiling Marissa" doesn't really doesn't seem appropriate, given subject matter of the article. Apparently, ZDNet needs a few more library photos of Mrs. Meyer.

    But the article does raise the question of what exactly is MS getting out of Bing. It doesn't seem to be making any money.
    John L. Ries
    • It isn't.

      Yahoo thought Bing was a better search engine than what they were using.

      It wasn't.

      Bing users had to be paid to even use it.
      jessepollard
      • Bing is better than Google, but, if you judge better as being

        the one with the biggest amount of traffic, then Google is "better". But, the quality of the searches is not what Google is better at.
        adornoe
        • Shockingly...

          ...when I put the website for my wife's new yarn shop on line recently, Google was the first to pick it up, as expected, since the site is hosted on Google; but Google was also the first to pick up third party references to the shop. Bing/Yahoo, DuckDuckGo (my personal favorite), Ask.com, and Alta Vista did finally pick up both, but it took a week or two.

          Give the Googlers their due; their search engine works well.
          John L. Ries
  • Trojan Horse

    Pardon me while I don my tinfoil beret, because it appears Marissa is doing everything she can to quickly expand the Google office space into Yahoo - there just happens to be a few people she has to move back to Redmond first.
    monteith
    • Just like..

      Elop is doing with Nokia?
      czorrilla
  • I have an idea..... How about...

    IMPROVING YOUR SEARCH ENGINE IN HOUSE!!!!! Spend the Money MS is feeding you, for R&D into your own new improved Search engine. You want to compete with Google? Beat them at that. Bing is better than it used to be, but Google still leads because they still have the best search engine. No matter how much I try to NOT use Google.. I keep ending up there when I can't find something. This leads many people who are less stubborn than I am to just start with Google in the first place!

    Search is key... make search better... steal google users. Period.
    condelirios