14 DAY TRIAL // Yahoo has been trying to find a way to get out of its search deal with Microsoft, the Wall Street Journal has revealed, but has had little success in doing so.
In fact, it's likely it won't be able to until at least 2015. This while Microsoft has extended the search revenue guarantee for another year.
This guarantee ensures that Yahoo sees a minimum amount of revenue no matter how poorly the search deal performs.
Microsoft's Bing powers Yahoo Search, and Microsoft's search ad business powers the ads on Yahoo search results page.
But these ads have underperformed constantly since Yahoo abandoned search in 2010. Initially, Microsoft offered to guarantee a minimum revenue for a set period, and has extended that period twice now. The new extension lasts until April 1, 2014.
Meanwhile, especially since Marissa Mayer took over as CEO, Yahoo has been looking at alternatives and at terminating the deal with Microsoft.
It's generally accepted that a similar deal with Google would be much more lucrative and could even result in additional hundreds of millions of dollars in profit for Yahoo.
However, the 10-year contract with Microsoft is airtight and there are only a few ways of getting out. The simplest is to wait until 2015 when both parties can opt out of the deal, no strings attached.
Yahoo could also get out if Yahoo and Microsoft's combined revenue per search (RPS) drops below a certain percentage of Google's revenue per search. But, while the RPS is low, it's not low enough to trigger the clause.
Yahoo did try to partner with Google back in 2008, but regulators shut down that deal. Under Marissa Mayer, Yahoo has been looking at its options. Google is said to be interested in a search and ad deal, if it was possible.
Yahoo has even contemplated getting back into the search game with its own technology, though that would be quite the undertaking after it dismembered its search team.