The company disclosed in a recent regulatory filing that Microsoft had extended a revenue guarantee associated with the partnership, the second such extension since the 10-year pact took effect in 2010. Yahoo's revenue per search has been worse under the Microsoft deal than when it operated its own web-search technology and advertising system. Unlike the prior revenue guarantees from Microsoft, the latest extension affects only the US.
Meanwhile, Google has indicated to Yahoo over the past year that it is willing to enter into a potentially more lucrative partnership to provide web-search and search-advertising technology to Yahoo, according to people familiar with the matter. Google and Yahoo in 2008 tried to reach a similar pact but faced resistance from regulators.
Yahoo is unlikely to get out of its contract with Microsoft until at least mid-2015, the midway point of the 10-year agreement, when either party can potentially opt out, said a person familiar with the contract. There is another clause in the deal that allows Yahoo to sever it if the revenue per search falls below a certain level, but the revenue per search has been rising and doesn't appear likely to fall below that level, this person said.
