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2 commentsWednesday, August 5, 2009

Microsoft-Yahoo Deal Full Of Termination Clauses

One eye on the clock, another on Google

Although Microsoft and Yahoo (finally) announced a partnership one week ago, it seems that the deal is far from unbreakable.  Indeed, Yahoo's shared a few details with the S.E.C., and there are a number of interesting termination provisions attached to the arrangement.

The first can kick in if much more heel-dragging occurs, or more specifically, "if the conditions to commencement have not been satisfied by July 29, 2010."  Which is a nice sign that this won't still be under discussion come doomsday.

Then, Yahoo's been provided with some "outs" if the combination of it and Microsoft can't financially keep pace with Google.  The S.E.C. filing states that "Yahoo! may terminate the Search Agreement if the trailing 12-month average of the RPS [revenue per share] in the United States of Yahoo! and Microsoft's combined queries falls below a specified percentage of Google Inc.'s estimated RPS . . . or if the combined Yahoo! and Microsoft query market share in the United States falls below a specified percentage."

And there's one more "specified percentage" RPS clause that'll kick in at the five-year mark, too.

Onlookers who just want to see the dealings resolved may find the existence all of these provisions disheartening.  Yahoo supporters and shareholders may appreciate them, however, since they should help protect the company.

About the author:
Doug is a staff writer for WebProNews. Visit WebProNews for the latest eBusiness news.

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