Updated 10:41 PM EDT, Tue, Sep 21, 2021

Facebook or Google? Yahoo's Potential Deals Following Updated Partnership With Microsoft

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Yahoo and Microsoft have renewed their search partnership with a couple of major changes, recent reports indicate.

All of Yahoo's previous responsibility for sales relationships regarding Bing search ads will be put under Microsoft's hands in the coming months, the Business Insider reported.

At this point, Yahoo is given the opportunity to pull 51% of its traffic from Bing, while the remaining 49% may be monetized from somewhere else -- Yahoo's own ad units or another search provider.

According to Nasdaq, the updated search partnership is expected to provide more flexibility in presentation of results, as well as management of advertising teams.

The amendment is contained within a 10-year agreement that's been set for reevaluation "at the five-year point," Nasdaq said. The deal has been signed in 2009.

The original agreement required Yahoo to use Bing search results and ads for all desktop searches, The New York Times noted. However, the company was free to use other engines for mobile devices.

Today, Microsoft is run by CEO Satya Nadella, while Yahoo is under the helm of Marissa Mayer, Google's then-employee No. 20.

As noted by Quartz, speculations have it that Yahoo may outsource the rest of its search traffic to Google, though such partnership has been previously opposed by regulators.

The outlet cited remarks from Ben Schachter, Macquarie Securities analyst, who thought of Mayer striking a deal with Facebook instead.

Schachter expressed, "While the press and others will likely discuss the potential for a Google/Yahoo search partnership, we think that investors should be thinking about the potential for a Facebook/Yahoo partnership. Facebook has been emphatic that they are still pursuing search."

"It makes a lot of sense for Yahoo to become Facebook's first major ad distribution partner, via search (and potentially display)," the analyst added.

Search is important to Yahoo's business, The New York Times said, as it accounted for 35 percent of the company's previous annual revenue. This is equivalent to $1.8 billion.

Citing information from comScore, The NY Times wrote that in March, Google had the majority of desktop search market with 64.4% (U.S.). Bing accounted for 20.1%, while Yahoo fell behind with 12.7%.

Nevertheless, Nadella and Mayer are both looking forward to the amended partnership. Nadella said in a press release, "Our partnership with Yahoo is one example of the diverse partnerships we'll continue to cultivate in order to have the greatest impact for our customers."

Mayer, on the other hand, expressed, "This renewed agreement opens up significant opportunities in our partnership that I'm very excited to explore."

What do you think about Yahoo and Microsoft's updated deal? How should Yahoo use its 49% hold?

Share your thoughts in the comments below.

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