Microsoft & Yahoo Search Deal

Microsoft sought to purchase Yahoo in 2008 but after several attempts found its offer rebuffed.

Instead, Yahoo decided to pursue a search deal with Google that same year. That deal never happened, after the US Department of Justice suggested in November 2008 there would be a legal fight if the companies moved ahead.

Yahoo’s CEO at the time, Jerry Yang, then said Yahoo was open to a new offer from Microsoft. By July 2009, under new Yahoo CEO Carol Bartz, the idea of acquisition was replaced with a deal where Yahoo gave up its search technology in exchange for listings and ads from Microsoft’s Bing search engine, with Yahoo gaining a big cut of any ad sales. The deal was less generous than the acquisition offer from the previous year, as our comparison chart illustrates.

The “Yahoo-Microsoft Search Alliance” deal was formally signed in December 2009; it received all legal clearances needed in February 2010. It never performed as Yahoo expected, continually falling short of revenue promises.

When it came up for renewal in April 2015, under Yahoo CEO Marissa Mayer, it was agreed that Yahoo would have flexibility to deliver 49% of its desktop search queries however it wanted. Microsoft would power the listings and ads on the other 51%. Yahoo would continue to have full control over mobile searches, as it did when the original agreement was signed, at a time when mobile searches weren’t seen as important.

In October 2015, Yahoo announced that — pending legal clearances — it would be partnering with Google to provide listings and ads for some of the 49% of desktop search queries where it doesn’t have to use Microsoft. It may also use Google for mobile, where it has no restrictions.

See our Yahoo-Google Search Deal page for more about that. As for the Yahoo-Microsoft Search Deal, our stories below have background and the latest information.