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Yahoo Inc. (NASDAQ:YHOO) & Microsoft Corporation (NASDAQ:MSFT) Enter Into a Strategic Deal

After holding months of parleys for months together, Yahoo Inc. (NASDAQ:YHOO) and Microsoft Corporation (NASDAQ:MSFT) made an announcement that they have altered their six-year-old search partnership. The amended pact is aimed at giving more flexible approach to the way their companies’ affairs are run and the manner in which the advertising teams are -managed.

Yahoo Inc, on its part, maintains that it is laying the foundation to emerge as a top player in Web search after finding itself in the background for many years due to challenges posted by Google Inc.

With the deal in force, Yahoo Inc. believes that it will have enhanced flexibility to prop up the search experience on any platform. Further, the signed deal will give the software major control over the way search results are displayed on mobile devices and desktops.

The deal has been struck just at the right time and is expected to bring in the desired stability for both the partners. For some time, Yahoo’s CEO, Marissa Mayer has been making big strides towards transforming the company into a mobile-friendly app.

As per the terms of the deal, Yahoo would garner 88% of the search revenue created by its sites in the first five years. Microsoft Corporation has declared its readiness to persist with present arrangement wherein Yahoo would be a fraction of the Bing ads it served.

Steve Ballmer-headed Microsoft Corporation and Yahoo’s Carol Bartz came together to sign the 10-year deal in 2009, so as to thwart the challenge posed by Google. Subsequently, Microsoft’s search share had gone up from 8.4% to 11.5%.

Yahoo averred that Microsoft Corporation (NASDAQ:MSFT) did not show the urge to reach the set goals. Reacting to Yahoo’s comment that Microsoft’s lack of urge spoiled the party, the software major retorted that rather certain technical glitches and other extraneous factors came in the way resulting in the deal being ended up as a non-starter.

Net market Share’s data revealed that in the month of March, Microsoft’s Bing held 8.1% of the global search market. Its market share is slightly ahead of Yahoo’s 7.7%.

Published by Pamela Garcia

Pamela Garcia is a keen follower of U.S. stock market

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