Yahoo and Microsoft may be modifying an agreement that has tied the fates of the two companies together for the past five years. Yahoo revealed in a regulatory filing today that the two parties have amended the search alliance agreement they signed in 2010 so Yahoo has until late April to terminate the deal.
Under a provision in the original agreement, Yahoo could choose to exit its search alliance with Microsoft up to 30 days after February 23 of this year. To do so, a 12-month average of its revenue per search in the U.S. would have to be less than an undisclosed percentage of Google’s estimated 12-month average revenue per search in the U.S. The amendment the two companies entered into would give Yahoo until April 24 to break off the alliance, assuming that the company meets that requirement.
Under the search alliance agreement, Yahoo uses Bing’s search technology, instead of a search engine developed in-house, and Microsoft powers Yahoo’s search-based advertising system. It began five years ago, at a time when Carol Bartz was CEO of Yahoo and Steve Ballmer held the top job at Microsoft.
Today’s filing implies that the two companies are in the midst of active negotiations about the future of their search partnership, since they likely wouldn’t go through all the trouble of amending the agreement otherwise. That squares with Yahoo CEO Marissa Mayer’s statements on the company’s most recent earnings call, saying that Yahoo was “actively exploring” its options with Microsoft. If Yahoo does not (or cannot) exercise the option to exit, the alliance will remain in effect for another five years.
Representatives for Yahoo did not immediately respond to a request for comment on this report.
Post updated since original publication. The purpose of the filing was more ambiguous than it originally appeared.