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Yahoo sours on its search partnership with Microsoft

New court filings reveal that Yahoo has allegedly been stalling its rollout of Microsoft's search technology in Taiwan and Hong Kong.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
2 min read
Yahoo CEO Marissa Mayer and CFO Ken Goldman talk earnings during a live video stream on October 15. Screenshot by Donna Tam/CNET

In a quest to compete with search king Google, Yahoo and Microsoft shook hands in 2010 on a 10-year partnership to jointly boost their search market share. After three years, Yahoo now appears to be having some cold feet.

Court filings released on Monday reveal that Yahoo's CEO Marissa Mayer has allegedly been trying to put the brakes on the partnership, according to Reuters. In the filing, Yahoo said it wants to put the deal on hold until it can talk to Microsoft's new CEO. Microsoft CEO Steve Ballmer announced in August that he'd be stepping down, his successor has not yet been revealed.

"If we decide a new CEO has the same commitment that Steve Ballmer had, then we will go forward with the transition," Yahoo senior vice president of search products Laurie Mann is quoted as testifying in the court filings, according to Reuters.

Yahoo now uses Microsoft's search advertising platform in 14 of the 16 international markets. Yahoo was supposed to transition to the final two markets, Taiwan and Hong Kong, in October. According to Reuters, Yahoo told Microsoft in September that it would not switch in October but hoped to in early 2014.

However, US District Judge Robert Patterson Jr. ruled on Monday that Yahoo must transition to Microsoft's search technology in Taiwan and Hong Kong as outlined by the deal, according to Reuters.

In May, it was reported that Mayer had been disappointed with the Microsoft deal since becoming Yahoo's CEO in 2012. Before Mayer was at Yahoo, the two companies entered into the partnership in which Microsoft would power Yahoo search and Yahoo would become the sales force for Microsoft's premium properties. Mayer has also publicly expressed her dissatisfaction with the partnership, saying that the arrangement hasn't delivered the increased revenue or market share that was expected.

Google is leaps and bounds ahead of Microsoft and Yahoo in the search market. In an August survey by ComScore, Google was shown as having 67 percent of the market share, while Microsoft had 17.9 percent and Yahoo had 11.3 percent. Even though Microsoft and Yahoo have been working to up their market share over the last few years, they have pretty much just maintained the status quo.

CNET contacted Microsoft and Yahoo for comment. We'll update this story when we get more information.