Yahoo gets 31% of search revenue from Microsoft deal

Outsourcing search capabilities to Bing generates a significant portion of Yahoo's revenue in the most recent quarter, an SEC filing reportedly shows.

Justin Sullivan
Looks like Yahoo is more dependent on Microsoft than it lets on.

Both companies are steeped in a 10-year search partnership wherein Bing handles the Web crawling capabilities for Yahoo's home page, while Microsoft gets to brand each Yahoo search results page as "Powered by Bing." A US Securities and Exchange Commission filing recently made public showed that 31 percent of the company's revenue last quarter was generated through its partnership with Microsoft, reported Bloomberg on Tuesday.

Yahoo declined to comment on the filing.

The filing follows requests from the SEC that Yahoo clarify disclosures on its search and advertising business. The company previously said vaguely that the deal comprised more than 10 percent of sales, according to Bloomberg.

The revenue disclosure highlights the tricky relationship the two companies have as a result of the search pact. CEO Marissa Mayer, who inherited the deal put in place by former Yahoo CEO Carol Bartz, has indicated her dissatisfaction with the search partnership. But certainly, as the filing shows, it made up a significant percentage of Yahoo's revenue in the last quarter.

The relationship dynamics could get even more interesting as Yahoo executes its search strategy in the coming year and beyond. The deal, according to the terms, has certain "outs," allowing each company to terminate it if it doesn't meet certain financial expectations.

 

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