Microsoft, Yahoo Get More Freedom to Walk Away From Search Deal

Yahoo! Inc. and Microsoft Corp. have updated their search agreement to make it easier for either company to exit the alliance.

The clause is part of a new deal that was reached following recent negotiations, and lets Yahoo or Microsoft terminate the agreement with written notice beginning later this year, according to a filing Monday. It also includes a transition period. Under the previous agreement, Yahoo could break off the deal, based on metrics around how much revenue it was getting for search ads.

Yahoo, which struck a 10-year search-and-advertising deal with Microsoft in 2009, recently renegotiated the terms as Chief Executive Officer Marissa Mayer seeks new ways to drive revenue growth amid a turnaround effort. Under the new agreement, which was unveiled last week, Yahoo no longer will have to use Microsoft to serve all desktop-search generated ads.

“Our global partnership with Yahoo has benefited our shared customers over the past five years and I look forward to building on what we’ve already accomplished together,” Microsoft CEO Satya Nadella said in a statement on April 16, when the new agreement was announced.

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