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But Microsoft recently extended the contract's revenue guarantee

Yahoo wants to get out of a search contract it has with Microsoft in favor of a more profitable venture with Google, but it may have to hold on a while longer. 

Yahoo is currently locked in a 10-year search contract with Microsoft, which started in 2010. Under the contract's terms, Yahoo uses Microsoft's Bing search engine for search results on Yahoo sites. They have also coupled each of their search-advertising setups. As part of the deal, Microsoft receives 12 percent of the revenue Yahoo generates from search ads -- and Microsoft guarantees a certain amount of revenue for every search query on Yahoo's sites. 

This revenue guarantee expired on March 31, 2013, but Microsoft extended for another 12 months on April 30. Unlike the previous revenue guarantees from Microsoft, this extension affects only the United States. 

Microsoft's revenue guarantee is worth about $12 million to $15 million per quarter.


However, Yahoo said wants out of this contract in a regulatory filing Tuesday, and the new extension has made this a bit more difficult. Yahoo will likely have to wait until mid-2015 to kill the contract, which is the halfway point. 

While Yahoo's search revenue managed to increase 6 percent to $409 million in the first quarter of 2013 (compared to the first quarter of 2012), Yahoo wants out of the Microsoft deal in order to possibly enter into another contract with Google. 

Google could provide Yahoo with its Web search and search-advertising services, which are much more lucrative than Bing. Google and Yahoo tried to make this work in 2008, but the U.S. Department of Justice shot it down for antitrust purposes. However, Google and Yahoo could revamp the former pitch in an effort to pass regulatory issues. 

The only way Yahoo wouldn't have to wait until at least 2015 to exit the Microsoft contract is if Microsoft sells Bing or revenue-per-search falls below a certain level. 

Either way, it doesn't look like Yahoo will go back to developing its own search technology.

In February of this year, Yahoo CEO Marissa Mayer said that the company's search partnership with Microsoft is not delivering.
 
"One of the points of the alliance is that we collectively want to grow share rather than just trading share with each other," Mayer said at the Goldman Sachs Technology and Internet Conference in San Francisco.  

Source: The Wall Street Journal



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Yahoo blaming MS
By AlphaVirus on 5/8/2013 1:18:20 PM , Rating: 5
Yahoo is blaming Microsoft for its lack of growth. The search engine provided doesn't make any difference to the user. Most people I talk to don't even know Yahoo's searches are provided by Bing.

I have faith in Yahoo's CEO but this is a lousy call.

I know everyone has their own opinion but mine is that Bing > Google search.




RE: Yahoo blaming MS
By BifurcatedBoat on 5/8/2013 1:22:29 PM , Rating: 2
I disagree; I think it does matter. I stopped using Yahoo for search way back when they originally switched away from Google, and their search quality went down (this was long before Bing as well).

If they have Google's search again on their page, then once users learn that, if they went to Yahoo for news they might just start searching there as well.


RE: Yahoo blaming MS
By Mitch101 on 5/8/2013 1:54:39 PM , Rating: 2
What has yahoo done to convince users to use them or even remind people they still exist? Anyone recall the last time they had a commercial?

Whether they use Google, Bing, or go back to themselves without something to define themselves as different from Google or Bing it wont matter. The Fork says yahoo is done. Time to sell the farm while it still had a pulse.


RE: Yahoo blaming MS
By amelia321 on 5/9/13, Rating: 0
RE: Yahoo blaming MS
By drlumen on 5/8/13, Rating: 0
RE: Yahoo blaming MS
By Motoman on 5/8/2013 1:46:18 PM , Rating: 2
I have to admit that I wasn't really cognizant of the fact that Yahoo didn't have their own search engine anymore.

Although to be honest, I've never paid any attention to Yahoo - I can count on one hand the number of times I've looked at Yahoo.com. It's always struck me as, at best, a slightly more sophisticated Geocities website than anything to be taken seriously.

Not that anyone cares, but I've been a big fan of Webcrawler for a very long time. It just makes sense to me to use a metasearch engine that queries Google, Yahoo, and other search engines every time I look for something. It responds just as fast as Google.com would send me back a page, and then I get results from lots of different places...not just one.


RE: Yahoo blaming MS
By drycrust3 on 5/8/2013 3:48:20 PM , Rating: 3
quote:
Yahoo is blaming Microsoft for its lack of growth. The search engine provided doesn't make any difference to the user.

For a lot of searches it isn't so much the search engine as the parameters used by the search engine because it is almost certain that if you looked at the top results produced by Google in Bing or Yandex then those results would be somewhere there in the million or so results they found, but maybe many pages away, and vice versa of course.
To me one reason I use Bing is because they easily provide search results for just New Zealand (where I live), which neither Google or Yahoo offer.
So the main reason anyone uses a search engine other than Google, other than for reasons like "distrust", is because they want different results from what Google offer, so for Yahoo the answer isn't to produce the same results as Google and Bing, it is to produce different results, and you don't need a different database for that, because for most search engines the 1 million search results is largely the same, what you need is to use your own search parameters, where the top results you present are more or less unique to you.
For example, why not do what Bing does and breakdown results by country (for international users) or by city (say you are looking parts for your car), or why not provide different search parameter options (no, not hidden in some secret menu, on the first screen), so you might have one called "online shopping", where the search results are more online purchase oriented, one called "city" where the results are more your city relevant, e.g. local businesses or events or movies, one called "educational", where the results are more reference and encyclopedia oriented, one called "general" which uses the normal search parameters, etc? You don't need Google's database for that, Bing's will do.


RE: Yahoo blaming MS
By arazok on 5/8/2013 4:40:42 PM , Rating: 3
I’m amazed Yahoo gets any traffic at all.

Like everyone else, I abandoned them for search when Google came out. It was just superior.

But I always kept Yahoo as my home page. I’d still use them as a content portal, mostly for news and stocks. It was the best of both worlds. I’d use the search bar for google, and my yahoo home page for random content.

Then at some point in the last couple of years, I’m not sure when it really happened, Yahoo’s home page turned into a cheap whore in fancy clothes. The news was replaced with celebrity gossip, video links required you to watch ads, what looked like interesting articles turned out to be cheaply disguised marketing ads. I’ve removed Yahoo as my home page and never looked back.

They’re the next AOL. They failed at their core business and are trying to transition into something there is no demand for, which is a lousy content portal. The move to mobile is going to be the straw that breaks them.


RE: Yahoo blaming MS
By althaz on 5/9/2013 1:36:06 AM , Rating: 2
Whilst I agree that this probably doesn't matter (it seems pretty clear that Google are just offering more money) to the end client, I can't believe somebody would actually say Bing > Google in search...

Bing is not bad at search, and it is better in plenty of areas...but not in terms of actually finding what you want on the internet.

Bing is my go-to to find local businesses (Google is worse at this for me), but for anything actually on the internet that I'm trying to find, Bing rarely presents the best results up front. It offers some nice extra features, looks a little better than Google and has what many would call "good enough" search.

Google has "good enough" everything else and excellent search. For me, the quality of the search is everything, which is why I only use Bing on my phone (because I have no choice, actually this is the only thing I don't like about my Lumia).


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