Report: Yahoo needs Microsoft more than it wants to admit

mayer-marissaWhile CEO Marissa Mayer has been critical of Yahoo’s deal with Microsoft, it seems like the partnership may be more beneficial to the company than originally revealed.

Bloomberg reported today that revenue from Microsoft’s search partnership with the Sunnyvale-based company made up 31 percent of Yahoo’s quarterly revenue, according to a new letter the company filed with the SEC. Previously, Yahoo had reported that the deal comprised “more than 10 percent” of sales — which, while not technically innaccurate, significantly understated the reality of the situation.

Those numbers don’t necessarily square with Yahoo’s apparent attitude towards its alliance with Microsoft. Earlier this year, Mayer and her team tried to put the brakes on implementing Microsoft’s Bing Ads technology in Taiwan and Hong Kong because of concerns about what Microsoft’s new CEO might do with Bing.

Meanwhile, Mayer has also been strengthening ties between Yahoo and its neighbor Google, her former employer.

Currently, Yahoo and Microsoft are on year 4 of a 10 year partnership, which began under the direction of Carol Bartz, Mayer’s predecessor, in 2009. At the end of 10 years, the two companies can either choose to renegotiate terms, or end their partnership altogether. While Mayer’s attitude towards the deal would seem to point towards a breakup, Yahoo’s financials at the moment tell a different story.

  • Lawrence Lam

    SAT question: Mayer:Google::Elop:???

  • SilverSee

    It is never a good thing when ideology drives business decision-making. Let’s hope that’s not the case here.

    I’m sure it’s hard for Mayer to view the Microsoft relationship dispassionately given she has spent her career working in a milieu (the Valley) with an insular and hostile mythology about Microsoft, and working for a man (Eric Schmidt) who has competed vigorously against Microsoft at Sun, Novell, and Google. Some of that animosity builds up in even the smartest of us.