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August 6, 2009

Thursday, August 6, 2009 The 10 Fine Print Facts on Yahoo and Microsoft Deal You did not Know

Yahoo May Terminate Microsoft Search Ad Deal if Revenue per Search Lags Google: "Yahoo may end the Microsoft search ad deal if search engine giant Google's revenue-per-search query rate is higher than both Microsoft's and Yahoo's RPS rates. Microsoft will also hire 400 Yahoo employees as part of its search ad deal with Yahoo, and could end up sharing 90 to 93 percent of the search ad revenues in the second leg of the agreement, according to an 8-K filing from Yahoo.

Microsoft must hire 550 Yahoo employees, whether they need them or not

Did you know that the entire deal is in jeopardy if not completed by July 29 of 2010

Yahoo may terminate its 10-year search ad partnership with Microsoft if the revenue-per-search query rate of Yahoo's and Microsoft's combined U.S. queries falls below a certain percentage of Google's estimated RPS in a 12-month average, according to a filing with the Securities and Exchange Commission Aug. 4.

This provision, which underscores the laser focus Yahoo and Microsoft have on search market leader Google, changes in the second leg of the 10-year term.

Any time after the fifth anniversary of the deal, Yahoo has the right to terminate the search deal if just Yahoo's U.S. RPS is less than a percentage of Google's estimated RPS on a 12-month average.

Yahoo may also terminate the deal if Microsoft exits the algorithmic search or paid search businesses. Moreover, if Microsoft decides to sell its algorithmic search or paid search services businesses, Yahoo will have a 'right of first refusal and right of last offer to purchase such businesses.'

Both companies can quash the deal if it is not hashed out by July 29, 2010."

Read the fine print on some facts that most of us do not know here