Microsoft Extends Revenue Guarantee For Yahoo In The US For Another Year

Yahoo Bing

According to the recent SEC filings from Yahoo, Microsoft has extended the revenue guarantee for Yahoo search in the US for another year from April 1, 2013.  In 2009, Yahoo entered into the Search Agreement with Microsoft, which provides for Microsoft to be the exclusive algorithmic and paid search services provider on Yahoo! Properties and non-exclusive provider of such services on Affiliate sites.

Here is the details provided in the SEC filing,

Under the Search Agreement, for each market, Microsoft generally guarantees Yahoo!’s revenue per search (“RPS Guarantee”) on Yahoo! Properties only for 18 months after the transition of paid search services to Microsoft’s platform in that market. The RPS Guarantee is calculated based on the difference in revenue per search between the pre-transition and post-transition periods and certain other factors. The Company records the RPS Guarantee as search revenue in the quarter the amount becomes fixed, which would typically be the quarter in which the associated shortfall in revenue per search occurred. In the fourth quarter of 2011, Microsoft agreed to extend the RPS Guarantee in the U.S. and Canada through March 2013. The RPS Guarantee in the U.S. and Canada expired on March 31, 2013. On April 30, 2013, Microsoft extended the RPS Guarantee in the U.S. for an additional 12 months commencing April 1, 2013

You can read the full filing here.

Source: Yahoo

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