14 DAY TRIAL // Nobody expected the Yahoo Microsoft deal to go that smoothly and it's already seeing the first delays. When the deal was initially announced on July 29 the two parties said that a finalized agreement would be signed by October 27 but that date has come and passed and the two companies are now saying they need more time to work out all the details. The deal is still definitely going through and it should close sometime in early 2010. The delay was revealed in a SEC filing from the two companies.
“Microsoft and Yahoo! are committed to this agreement and believe this is a highly competitive deal that is good for consumers, advertisers and publishers. We have made good progress in finalizing the definitive agreements. Given the complex nature of this transaction there remain some issues that need some additional clarity and definitive details. So, the teams at Yahoo! and Microsoft are continuing to work on the remaining details, and we have mutually agreed to extend the period to negotiate and execute the agreement,” Yahoo said in a statement.
So what does this mean for the deal? Not much actually, the agreement is one of the biggest deals in web history and working out all the details is taking a little longer than the companies first anticipated. The deal would have Yahoo using Microsoft's search engine Bing for the underlying technology but will retain its own interface for the search result pages. Likewise, the advertising for both engines will be served through Microsoft's Ad Network but Yahoo will handle the big accounts.
The deal involves a small amount of money upfront for Yahoo over the course of the first three years to cover the transition costs but the bulk of the financial reward will come from revenue sharing. This too has a complicated scheme that stretches for 10 years. These are just the broad details of the deal and they don't cover any of the more technical aspects so it is easy to see why all of the details haven't been finalized yet.