14 DAY TRIAL // Microsoft and Yahoo have been engaged in a strange relationship for years now, but it is finally getting close to becoming official. The two Internet giants reached an agreement last summer, in which Yahoo practically handed over its search engine to Microsoft, but they haven't been able to actually sign it until now. The deal was originally supposed to be finalized on October 27, but the companies said they needed more time. Now though, they're ready and the deal will be signed by the end of the week, BoomTown reports.
Neither Yahoo nor Microsoft have confirmed this, but if everything goes according to plan, which it didn't the last time, we should see a definitive agreement this week. The reason for the delays is simple enough, it's a massive deal and the intricacies of getting the two search engines work together while keeping their separate identities took longer than the people at Microsoft and Yahoo had anticipated.
The two companies announced a huge but not totally unexpected deal in July. In it, Yahoo will hand over the technical side of its search engine to Microsoft and Bing will provide all of the results on any Yahoo property. Yahoo will keep its custom interface and can do what ever it wants with the actual data coming from Bing. The advertising on both search engines will be served by Microsoft's ad network and Yahoo will handle the big name clients.
The deal came more than a year after several talks of Microsoft buying Yahoo altogether. Microsoft made several generous offers to acquire the company, but Yahoo's CEO at the time, Jerry Yang, a cofounder of the company, decided it didn't need Microsoft's help. When the two companies finally ended up in a deal together earlier this year, the terms were significantly less attractive for Yahoo which would get a chunk of the advertising server on its sites, but didn't get any upfront payment, as was previously expected, apart from $150 million over three years for “unforeseen costs” associated with the merger.