Yahoo's new CEO could change search deal with Microsoft

It's been a very odd last 12 months over at Yahoo. In September 2011, they fired their CEO Carol Bartz over the phone. In January, the company hired a new CEO, Scott Thompson, but he resigned in May after it was discovered he did not have a computer science degree from Stonehill College, as his official bio at Yahoo claimed. In between, the company saw its co-founder Jerry Yang depart Yahoo, and it laid off 2,000 employees.

In July, Yahoo hired former Google executive Marissa Mayer to be its new CEO. Mayer has already made some cosmetic changes, including offering to pay for a new smartphone for all full and part-time employees. Now a new report claims that Mayer is about ready to reveal her grand strategy for Yahoo.

AllThingsD.com reports, via unnamed sources, that Mayer was in two days of meetings with Yahoo’s board of directors last week to discuss her plans for the company. She is also supposed to have a company-wide meeting with employees on Tuesday.

One of the things that Mayer may change is Yahoo's relationship with Microsoft. Yahoo entered into a deal with Microsoft in December 2009 that put in Microsoft's Bing search service as the core technology behind Yahoo's search engine. The deal has allowed Bing to slowly take away some search engine market share away from Google.

This new report doesn't give specifics on what Yahoo's new search deal with Microsoft will be like under Mayer. However, a separate AllThingsD.com report claims that Yahoo will likely stick with Microsoft for its search technology. For one thing, if Yahoo were to set up a contract for search with Mayer's former employer at Google, it will likely raise some eyebrows from federal regulators.

For another, breaking the Bing search technology contract with Microsoft would cause its own set of legal issues. The story quotes an unnamed Microsoft official as saying, "They can try to get out of the deal. But that’s a lot easier threatened than done."

Source: AllThingsD.com | Image via Yahoo

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21 Comments

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If they really wanted to change, they should drop both Bing and Google as options and switch to another engine like DuckDuckGo or create their own.

aviator189 said,
Yahoo will likely stay with MS regarding search.
They probably want to part, but the legal issues and everything...eh.

The MS deal will not be touched, I guess the deal will be revised regarding revenue. Well, that's what the bus driver told me.

For those asking about the issue with regulators, it's the fact that Yahoo hiring a Google exec who then brokers a deal with Google to increase their already dominant share in the market may be seen as anti-competitive. Not necessarily, but it's possible.

However, I doubt they will break the deal with Microsoft. For one thing, Meyer needs to stand on her own. Copying what was successful at Google is one ting, but this would make her look like a Google stooge, as if she's still a Google exec, and just a CEO in name. She won't want that. It would look terrible both to her employees and to the shareholders.

Also, the partnership with Microsoft really helps Yahoo!. It makes them different than Google (the dominant player), while still providing a value-add over Bing. Yahoo offers their service integration along with different search results than the dominant player using an engine that (if the marketing is to be believed) is supposedly preferred on an average "two to one in blind testing." Solidifying and clarifying that relationship (perhaps even extending Yahoo! services to Bing?) could really help them.

Yahoo can switch to Google if they want to and MS don't hurt one bit. By doing so, Yahoo is like who*res who goes for the highest pay. Personally, Yahoo should break away from MS or Google and stay focused on standing on it's own. Isn't Marissa a top marketing sales person from Google.


For another, breaking the Bing search technology contract with Microsoft would cause its own set of legal issues. The story quotes an unnamed Microsoft official as saying, "They can try to get out of the deal. But that's a lot easier threatened than done."

Why on earth would Yahoo get in bed with people like that? The sooner they switch back to Google the better.


For one thing, if Yahoo were to set up a contract for search with Mayer's former employer at Google, it will likely raise some eyebrows from federal regulators.

Considering that Yahoo used to have a deal with Google, I don't see why federal regulators would be concerned, unless of course Microsoft complains. And even then, Google isn't buying Yahoo.

simplezz said,
Why on earth would Yahoo get in bed with people like that? The sooner they switch back to Google the better.

The Article
For one thing, if Yahoo were to set up a contract for search with Mayer's former employer at Google, it will likely raise some eyebrows from federal regulators.

simplezz said,
Why on earth would Yahoo get in bed with people like that? The sooner they switch back to Google the better.
Then you can say by by to inovation on the search engine market, and the only one who is doing that are Yahoo and Microsoft (together).

simplezz said,
Why on earth would Yahoo get in bed with people like that? The sooner they switch back to Google the better.

Get in bed with what kind of people? People who expect other businesses to abide by contracts and stick to their legally-binding word?

Kyle Davis said,

Get in bed with what kind of people? People who expect other businesses to abide by contracts and stick to their legally-binding word?

I am pretty sure nobody here has seen these "contracts" so I wonder how can you make such statements.

simplezz said,
Why on earth would Yahoo get in bed with people like that? The sooner they switch back to Google the better.
The same reason that you would get in bed with anyone that signs a contract. Breaking a contract this large, which has largely helped to keep Yahoo relevant, as their own search engine was not, as well as providing a massive revenue stream without any maintenance on their end (Microsoft does 90% of the work, and Yahoo just gets to cash the check at the end of it).

The statement that you are flipping out about would be the same statement made by anyone watching their business partner think about breaking their contract. To suggest that Google would do--or say anonymously--anything different is nonsense.

simplezz said,
Considering that Yahoo used to have a deal with Google, I don't see why federal regulators would be concerned, unless of course Microsoft complains. And even then, Google isn't buying Yahoo.
Yahoo had a deal with Google to help with ads, not their search results. http://www.google.com/yahoogooglefacts/

Fritzly said,

I am pretty sure nobody here has seen these "contracts" so I wonder how can you make such statements.


so you think these companies made these deals through pinky promise?

grayscale said,

so you think these companies made these deals through pinky promise?

Actually quite the opposite...... and a lot of appendixes as well, guess.

Skyfrog said,
This company is a train wreck. Should have agreed to let Microsoft buy them when they had the chance.

Absolutely: shareholders would have made a lot of money...... and by now Ballmer would have been fired. :-)

scumdogmillionaire said,
If she wants to remain the CEO of a company that still exists she'd better not rock the boat.

Not necessarily.....