Yahoo
Microsoft has complete a search revenue guarantee contract with Yahoo for one more year, amid reports that the Internet company is trying to break its 10-year contract with Microsoft.
The Redmond, Washington, software company, has decided to extend the warranty for an additional one year starting April 1, 2013, but only in the U.S., Yahoo said in a regulatory filing on Tuesday. Microsoft had in 2011 agreed to extend the guarantee in the U.S. and Canada through March 2013.
Under a 2009 search agreement for which implementation began in Feb 2010, Microsoft guaranteed Yahoo’s profits per search on its properties for 18 months after the transition of its paid search services to Microsoft’s platform in each market, to protect Yahoo from the impact of the transition. It was part of a broader deal by which Yahoo moved its search backend to Microsoft’s Bing and its paid search services to Microsoft’s platform.
The so-called RPS Guarantee was calculated based on the difference in revenue per search between the pre-transition and post-transition periods and certain other factors, as Yahoo transitioned its paid search to Microsoft platforms. “To date, there has been a gap in revenue per search between pre-transition and post-transition periods in most markets and Microsoft has been making payments under the RPS Guarantee to compensate for the difference,” Yahoo said in the filing.
Yahoo said that in line with the 2009 agreement, it had completed the transition of its search to the Microsoft platform in all markets, and also transitioned paid search in several markets.
//
Huzaifa Ali Zai 