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August 3, 2009

Microsoft to pay $50m annually to Yahoo for three years

Also to hire 400 yahoo employees

By CBR Staff Writer

Microsoft has agreed to pay $50m annually to Yahoo during the first three years of the 10-year internet search partnership, which the companies have entered into last week. Yahoo may use these payments, a total of $150m, to partially cover transition and implementation costs not otherwise covered under the search agreement.

Yahoo and Microsoft have also agreed on a transition and implementation plan and a schedule for implementing Microsoft’s algorithmic search services and paid search services on all Yahoo Properties and Syndication Properties. ‘Syndication Partner’ means a third party with whom Yahoo has contracted to provide algorithmic search services or paid search services.

Microsoft is expected to hire approximately 400 Yahoo employees and pay them competitive compensation packages. In addition, Yahoo and Microsoft will mutually agree on a retention plan, which would be paid for by Microsoft, in order to assist in retaining the employees. It will also hire additional 150 employees from Yahoo to assist it in providing the transition services.

The transition and implementation plan will be for a period of 24 months with an option to extend it for up to three additional months, subject to fulfilment of certain conditions.

The parties intend that the transition and implementation plan will be either set forth in a separate transition services agreement or as part of the search agreement.

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