Sat, Apr 18, 2015 - Page 14 News List

Yahoo, Microsoft change search partnership terms

GRADUAL CHANGES:Yahoo said that it would start to deliver its own results and ads for up to half of searches on its sites and apps, with the shift occurring over time

NY Times News Service, SAN FRANCISCO

Marissa Mayer has finally gotten what she has wanted ever since she left Google Inc three years ago to run Yahoo Inc: a chance to build a new experience for searching on mobile phones and the Web.

Yahoo and Microsoft Corp on Thursday announced that they had amended their 10-year search partnership to allow Yahoo to deliver its own search results and ads for up to half of the searches done by visitors to Yahoo sites and apps.

Under the original agreement struck five years ago, Yahoo was required to use Microsoft’s Bing search results and ads for all desktop searches, although it was free to use alternatives on mobile devices.

Yahoo’s 1 billion users will not see a new search experience immediately, and any changes will probably be gradual. The venerable Internet company, which dominated Web search before the rise of Google, sold its search technology to Microsoft under the original agreement and only has a small team devoted to search now.

However, Mayer, who oversaw the interface and other major elements of the search experience at Google, has made it clear that she wants Yahoo to innovate on search, and the company has been experimenting with new approaches on mobile devices, particularly in personalizing results and presenting ads.

Search is vital to Yahoo’s business, accounting for 35 percent of the company’s revenue last year, or US$1.8 billion. Under the original agreement, Microsoft gives Yahoo about 90 percent of the revenue from ads it shows on Yahoo. The companies said that, under the revised deal, “this existing underlying economic structure remains unchanged.”

Desktop users in the US conducted 12.7 percent of their searches on Yahoo and 20.1 percent on Bing last month, according to research firm comScore. Google dominated the market with 64.4 percent of searches.

Microsoft has poured billions of dollars into search. The company was a primary agitator behind the European Commission’s decision on Wednesday to bring antitrust charges against Google, accusing the company of abusing its dominance in search to hurt consumers and competitors.

Yahoo will now be able to sell desktop search ads to advertisers through its Gemini platform, which the company is building into a one-stop shop for buying ads across all Yahoo properties, as well as other apps and sites in its network.

Microsoft is to gradually take over sales of all ads for Bing search, allowing it to integrate the team more closely with the people developing search technology. Previously, the premium ads were sold by Yahoo sales representatives.

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