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Microsoft takes over Yahoo!

Posted on Aug 12, 2009

The long-awaited deal between Yahoo! and Microsoft has finally been announced with Yahoo filing an agreement with the SEC last week. The major details are (as highlighted in a ZDNet blog post) :

• For the first five years of the 10-year-agreement, Yahoo will be entitled to receive 88% of the net revenues generated from Microsoft’s services on Yahoo Properties - thereafter called its Revenue Share Rate.
• Yahoo! will also be entitled to receive its share of the net revenues generated on Syndication Properties after the Syndication Partner’s share of net revenues is deducted.
• After the fifth year, Microsoft will have the option to terminate Yahoo!’s sales exclusivity for premium search advertisers. If it does so, Yahoo’s Revenue Share Rate increases to 93% for remaining time. If Yahoo exercises its option to retain its sales exclusivity, the Revenue Share Rate drops to 83 percent for the rest of the term. If Microsoft does not exercise its option, the Revenue Share Rate will become 90% for the remainder of the Term.

Yahoo! CEO Carol Bartz posted a "What our Microsoft Deal Means to You" entry on their blog on July 29th, giving a rundown of the new features and benefits of Yahoo! after the merge. "In short, everything’s just going to get a whole lot better for you."

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