Yahoo and Microsoft strike fresh search partnership deal

Yahoo and Microsoft have agreed to shake up their decade-long search partnership but have stopped short of transforming the financial structure of the deal. Under new terms, Yahoo only has to send the majority of its traffic to Microsoft’s search engine Bing, rather than all of it. The Internet company is now free to do what it likes with up to 49 percent of search queries -- either fulfilling them itself or striking a deal with another company like Google. In return, Microsoft will control the advertising served next to the searches it does solve, requiring it to grow its search advertising sales team and enabling it to build relationships with marketers that it could potentially cross sell other products to.

Marissa Mayer, Yahoo’s chief executive charged with trying to turnround the ageing Internet company, had been disappointed with the previous deal. The former Googler built a career around search and wanted more control over how it was done. Mayer said she had worked closely with Satya Nadella, Microsoft chief executive, for months to establish the deal. “This renewed agreement opens up significant opportunities in our partnership that I’m very excited to explore,” she said.