Yahoo can escape from itssearch deal with Microsoftif undisclosed search and
revenue targets are missed, a regulatory filing has
revealed.
Documents filed by Yahoo with the US Securities Exchange show
the internet firm can walk away if the combined share of search
queries falls below a set level, according to the
Financial Times.
Yahoo can also pull out of the deal if its revenue per search
drops below a set percentage of Google's.
The documents also show for the first time that Microsoft will
pay Yahoo $50m in each of the first three years of the 10-year deal
to defray transition costs.
These payments are in addition to Yahoo's projected $275m in
annual net income gains from the deal with Microsoft.
When the deal was announced, the partners said Microsoft will
provide the search results to its own Bing search engine as well as
Yahoo's pages.
Microsoft will also process the self-service adverts linked to
specified search phases and Yahoo will handle face-to-face sales of
search adverts for both companies.
This means Microsoft is taking over the technology component of
the search operations that will enable Yahoo to save millions of
dollars while keeping 88% of revenue from adverts placed on its
pages for five years.
Yahoo will get between 83% and 93% of that revenue in the
following five years, depending on options given to each side,
according to the latest documents.