Yahoo! and Microsoft entered into the 11 amendment to the search and advertising sales agreement. Yahoo had sales exclusivity for Yahoo's and Microsoft's premium advertisers and now this sales exclusivity will be terminated.
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Previously under the Search Agreement, Microsoft was the exclusive algorithmic and paid search services provider to Yahoo on personal computers for Yahoo's online properties and services and for search services provided by Yahoo to its distribution network of third party entities who integrate Yahoo's advertising offerings into their Websites and other offerings.
Microsoft was the non-exclusive provider on mobile devices. Pursuant to the Amendment, Microsoft will provide such services on a non-exclusive basis for Yahoo Properties and Affiliate sites on personal computers.
Commencing on May 1, 2015, Yahoo agrees to request paid search results from Microsoft for 51% of its search queries originating from personal computers accessing Yahoo Properties and its affiliate sites and will display only Microsoft's paid search results on such search result pages.
Additionally, Yahoo will now have the ability in response to queries on both personal computers and mobile to request algorithmic listings only, paid listings only or both algorithmic and paid listings from Microsoft.
To the extent Yahoo requests algorithmic listings only or requests paid listings but elects not to display such paid listings, Yahoo will pay Microsoft serving costs but not a revenue share. In other cases and with respect to the volume commitment, Yahoo will pay Microsoft a revenue share.
Previously under the search agreement, Yahoo had sales exclusivity for Yahoo's and Microsoft's premium advertisers. Pursuant to the Amendment, this sales exclusivity will terminate on July 1, 2015. Yahoo and Microsoft will develop a plan to transition premium advertisers for Microsoft's paid search services to Microsoft commencing on July 1, 2015 and to be completed by January 31, 2016.
Yahoo is entitled to receive a percentage of the revenue generated from Microsoft's services on Yahoo properties and on affiliate sites after deduction of the affiliate sites' share of revenue and certain Microsoft costs.
Under the Search Agreement the Revenue Share Rate was 88% for the first five years and then increased to 90% on February 23, 2015. Pursuant to the amendment, the revenue share rate will be 93%, but will now apply before deduction of the affiliate sites' share of revenue. ■