Yahoo and Microsoft - Escape Clauses
Yahoo has escape clauses built into the Microsoft deal
Yahoo can quit its search deal with Microsoft if certain targets are not reached. For example, if Microsoft is unable to produce advertising revenue within a certain undisclosed percentage of Google’s. This is calculated using a 12-month average of the RPS (revenue per search query).
It can also escape if search queries fall below a, once again undisclosed, percentage of the market.
The details of the deal will have to be finalised by October 27th 2009 and it may be terminated if it is not implemented by July 29 2010.
Other interesting items in the deal:
Yahoo! and Microsoft will implement Microsoft’s algorithmic search services and paid search services on all Yahoo! Properties and Syndication Properties. The transition and implementation plan should be complete by July 29 2011.
During the first five years of the Term, Yahoo! will be entitled to receive 88% of the net revenues generated from Microsoft’s services on Yahoo! Properties.
Yahoo and Microsoft Deal - Escape Clauses