Yahoo Is Getting 31% Of Its Revenue From Microsoft Deal

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The relationship between Yahoo and Microsoft has been a little rocky this year, but it has come out that the "Search Alliance" between the two companies is generating as much as 31% of Yahoo's revenue.

The SEC reportedly sent letters to Yahoo asking for more details on its revenue from search and display advertising. Bloomberg reports (via Danny Sullivan):

The company outlined the portion of revenue it gets from a search agreement with Microsoft Corp. (MSFT), following inquires stretching back several months, according to new regulatory filings that were made public yesterday. Yahoo, which had previously said the deal comprised more than 10 percent of sales, said the pact generated 31 percent of revenue in the latest quarter.

In other words, Yahoo may need that Microsoft deal more than anyone realized, given the company's public complaints about it.

CEO Marissa Mayer made comments at the Goldman Sachs Technology and Internet Conference in San Francisco in February expressing disappointment with the deal.

“We need to see monetization working better because we know that it can and we’ve seen other competitors in the space illustrate how well it can work," she was quoted as saying.

Naturally, there was a lot of talk that Yahoo could look to leave the deal (which was made before Mayer's time) early if things didn't improve, though Microsoft indicated it wold be hard for them to do so.

In May, Microsoft extended a revenue guarantee to Yahoo, as Reuters reported at the time:

The U.S. revenue-per-search guarantee, which had expired on March 31, will be extended for one year, and took effect on April 1, Yahoo said in its 10Q filing with the Securities and Exchange Commission on Tuesday.

This was the first agreement between the company since Mayer took over at Yahoo.

More friction between the two companies was revealed in October as they had been having a legal battle about rolling out Bing's search technology on Yahoo in Taiwan and Hong Kong. Yahoo was concerned about the uncertainty of Microsoft's leadership with Steve Ballmer stepping down as CEO.

Based on the new information, however, we wouldn't expect Yahoo to be walking away from the alliance anytime soon.

Image: Bing Ads

Chris Crum
Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.

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