Yahoo! Has Clause to Back Out From Microsoft Deal

Last week, here at Crenk we reported that Microsoft and Yahoo! are entering into a deal to combine search technology and the revenue from their engines in a bid to strike Google who has a share of around 65% of the global market. Yahoo! and Microsoft barely have 28% – combined.

It has emerged that the companies’ lack of market holding has led to Yahoo! putting a clause in the agreement which states that Yahoo! can back out of the deal at any time before the scheduled five year renewal if their revenue share falls too low.

Yahoo! and Microsoft failed to specify what exactly the number was that would entitle Yahoo! to pull out should revenue fall below it however it is expected that the danger zone will be in the first eighteen months.

This is because any new service, whether continuing on from an old one or starting from scratch will experience growing pains.  A few other details have emerged since the deal was officially filed with the US Securities and Exchange Commission.

For example, Microsoft must hire 400 Yahoo! engineers and pay them “market-competitive” wages. Furthermore, a full deal must be struck by October 27th otherwise the debates will be brought to a arbitration panel.  Time is money.

I guess now we all have to play the waiting game. I wonder in two years time will be caught saying “I Binged myself and I’m 5^th in the search results!”.

Tags: bing deal merger microsoft News yahoo