Yahoo and Microsoft agreed to renew their search partnership with amendments to improve search results, create value for advertisers and develop ongoing flexibility for partners.
The tech companies reaffirmed their original partnership agreement in 2009, which was struck by former Microsoft CEO Steve Ballmer and former Yahoo CEO Carol Ann Bartz.
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Under the 2009 agreement, Microsoft provided paid and algorithmic PC search services to Yahoo. On the other hand, Yahoo was in-charge of the sales of search advertisements for both companies. The agreement also included a revenue sharing where Microsoft paid Yahoo a percentage of Bing ads delivered from Yahoo searches
Yahoo, Microsoft strengthened their partnership
Both companies spent months of negotiations on their agreement and eventually decided to renew it with changes to keep the partnership strong and productive. Yahoo generated 37% of its revenue from search partnership with Microsoft.
Under the amended agreement, Yahoo will now have more flexibility to improve the search results on any devices. It will continue to serve Bing ads and search results for a majority of its desktop traffic. The company will continue to control its ads for Gemini platform.
In exchange, Microsoft will exclusively handle the sales of ads delivered by Bing Ads platform.
The companies agreed to retain the underlying economic structure in the original deal.Yahoo and Microsoft believe their service to advertisers will be more effective by integrating the sales teams with those responsible for engineering. The companies will implement the changes this summer.
Revised partnership opens significant opportunities
In a statement, Yahoo CEO Marissa Mayer said she worked closely with Microsoft CEO Satya Nadella to revise the search agreement that enables them to enhance user experience and their search business.
“This renewed agreement opens up significant opportunities for our partnership that I’m very excited to explore,” said Mayer.
On the other hand, Nadella said, “Our global partnership with Yahoo has benefited our shared customers over the past five years, and I look forward to building on what we’ve already accomplished together. Our partnership with Yahoo is one example of the diverse partnerships we’ll continue to cultivate in order to have the greatest impact on our customers.”