Yahoo and Microsoft announced the renewal of their search partnership today after months of negotiations. The new agreement includes amendments to the former partnership. Yahoo will have more flexibility in terms of how it monetizes its traffic. Changes to both companies’ salesforces will also be made.
Yahoo will continue to display Bing search results and ads for most desktop search traffic. But the door is still open on how mobile search and ads will be handled.
Yahoo CEO Marissa Mayer and Microsoft CEO Satya Nadella negotiated the deal. Neither were leading the company when the original agreement was made.
In the initial decade-long agreement, Microsoft supplied both algorithmic and paid search services. The company also paid Yahoo 88% of Bing ad revenue for Yahoo searches. This structure is still in place under the new agreement.
While the initial percentage structure will remain, there are a few notable changes in the new agreement.
For starters, Yahoo has the ability to enhance the user’s search experience on any device as the agreement is non-exclusive for mobile and desktop. While Yahoo will still serve Bing ads the majority of the time, there is room for the company to monetize search traffic in other ways for the remaining percentage.
The other change we see with this new agreement is Microsoft being the exclusive salesforce for advertisements, which are being served through the Bing Ads platform. Yahoo will be doing the same for its Gemini platform.
With the new agreement, both Yahoo and Microsoft hope to secure a larger percentage of the search market. The two companies are expected to own 6.5% of the market globally this year.