The agreement struck between Microsoft and Yahoo, and the lifespan of that deal, is solely determined by Google’s performance.
An article at The Register states:
The SEC update reveals that Yahoo! can get out of the deal if the average revenue per search in the US falls below a specified percentage of Google’s estimated revenue per search. Yahoo! can also terminate the agreement if the two companies’ combined market share falls below a certain level.
Yahoo! can also pull the plug if Microsoft attempts to get out of the search business or tries to sell its search business.
When the news broke about Yahoo supposedly selling out to Microsoft, everyone thought that Yahoo was falling apart at the foundations and was about to disappear forever.
The more I learn about the actual structure of the Microsoft – Yahoo deal though, the more I’m realizing that Yahoo may have created a pretty good deal for itself – a very smart “win – win” situation.
And of course, I’m becoming more surprised as time goes on about the role that Google plays in this entire thing.
The way I see it – the burden is on Microsoft to perform and deliver this vision of being able to compete with Google. I will give Steve Ballmer credit for one thing, he certainly doesn’t set his goals too low!