Thu, May 09, 2013 - Page 15 News List

Microsoft extends search guarantee in deal with Yahoo


Microsoft has extended a guarantee that provides Yahoo with financial protection as part of the two companies’ Internet search partnership.

An arrangement requiring Microsoft Corp to pay Yahoo Inc a minimum amount per search on Yahoo’s Web site expired on March 31. That had raised concerns Yahoo might make less money from the Microsoft partnership.

Those worries eased on Tuesday with a regulatory filing that disclosed Microsoft is maintaining the revenue-per-search guarantee through March next year.

Yahoo, based in Sunnyvale, California, did not reveal the minimum amount that it is likely to see under the Microsoft guarantee, but Yahoo chief financial officer Ken Goldman told analysts last month that the company’s revenue would decline by between US$50 million and US$60 million during the rest of this year without the guaranteed Microsoft payments.

Microsoft extended the guarantee on April 30, retroactive to April 1, according to Yahoo’s filing.

Yahoo’s filing contained other good news besides the extension of the Microsoft guarantee. The documents also provided more details about the robust growth at Alibaba Group (阿里巴巴), a Chinese Internet company in which Yahoo owns a 24 percent stake.

Alibaba’s earnings during the final three months of last year more than doubled to US$642 million, while its revenue climbed 80 percent to US$1.8 billion. That was illuminating information because Alibaba is still a privately held company. Alibaba is expected to go public in the next two years, so Yahoo may reap a huge windfall by selling its shares.

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