Yahoo! Adds Clauses to Microsoft Deal
Last week’s announcement of a Yahoo!-Microsoft partnership brought on many thoughts on how this would affect the search engine sphere. The announcement also came with explanation on what aspects of a search engine company would be owned by either Yahoo! or Microsoft. Mainly, Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites. This week, more information was released on what the deal would entail for both companies, and Yahoo! has some sticking points to this deal.Yahoo! has created a series of clauses which would free it from its partnership if Microsoft does not meet certain expectations. Some of these clauses state that:
Yahoo can abandon the deal if Microsoft does not produce advertising revenue per search within a certain – undisclosed – percentage of Google’s.
Microsoft will pay Yahoo $50m a year for the first three years of the deal to cover unforeseen transition costs.
Yahoo can keep 88% of the net revenues from advertisements placed on its pages for five years and between 83% and 93% of the revenue for the remaining five years.
Is the Yahoo!-Microsoft deal as strong as they had made it out to be? Only time will tell whether this partnership will strengthen or fizzle out.
At least Yahoo has gone from delusional to desperate. That’s a good thing. Desperate is realistic.
They now have the cash to ride out the next few years. Google’s dominance will probably wax and wane over the next 5 or 10 years so it’s good that Yahoo has some cash to stay competitive.
We need more Search Engines in general so having MS underwrite Yahoo is good. Hopefully it will make both stronger. Google is great but it needs more competitors.