I got two calls yesterday from people asking what I made of the Yahoo-Microsoft failure to meet their self-imposed search-deal deadline (October 27). I said it was probably just a case of needing more time to work through some of the details rather than a warning sign that the entire deal was in jeopardy.

There’s much at stake for both companies (somewhat less for Bing) in having committed to this deal. The market would punish both if the deal were to fall apart. It would be very hard for Yahoo to recover in the short term, having lost some of its best search people (many of whom are now working for Microsoft). And Microsoft would lose the reach that Yahoo search provides. However, ironically, Bing may be taking share from Yahoo rather than Google if these recently released iCrossing numbers are right.

The companies filed a form 8-K with the US Securities & Exchange Commission extending the time for completing the details of the search deal they announced many months ago. Here’s the text of the filing:

On October 28, 2009, Yahoo! Inc., a Delaware corporation (“Yahoo!”), and Microsoft Corporation, a Washington corporation (“Microsoft”), mutually agreed to extend the period to negotiate and execute a Search and Advertising Services and Sales Agreement and a License Agreement (the “Definitive Agreements”) reflecting and supplementing the provisions of such agreements as set forth in annexes to their binding letter agreement dated July 29, 2009 (the “Letter Agreement”). The Letter Agreement specified that the parties would execute Definitive Agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized. The parties are working diligently on finalizing the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible. The Letter Agreement was the subject of a Current Report on Form 8-K filed by Yahoo! on August 4, 2009.

The information in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Yahoo! under the Securities Act of 1933, as amended, or the Exchange Act.

(emphasis added.)

For more on where Yahoo stands, see Danny’s coverage of Yahoo Analyst Day.

There’s more coverage on Techmeme.

Related Topics: Microsoft: Bing | Yahoo: General | Yahoo: Partnerships | Yahoo: Search

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling