Yahoo, Microsoft need more time to close search deal

The companies missed a deadline Tuesday and now hope to finalize the deal by early 2010

Yahoo and Microsoft have missed a deadline for finalizing their search and advertising deal and have now extended the deadline for an unspecified period.

When the companies announced in July that Microsoft's Bing search engine would power Yahoo's search results, they said that they planned to finalize the deal by Oct. 27 or use an arbitration panel to hammer out their differences.

In a filing with the U.S. Securities and Exchange Commission on Wednesday, Yahoo said the companies have agreed to extend the period to negotiate and execute the deal.

"Given the complex nature of the transaction, there remain some details to be finalized," Yahoo said in the filing. "The parties are working diligently on finalizing the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible."

The filing does not provide a new deadline for finalizing the agreement.

In a statement, Microsoft said it was committed to the agreement and that the companies had mutually agreed to extend the deadline.

"We plan to do this as expeditiously as possible. Both companies are optimistic that we will be able to close this deal by early 2010," Microsoft said.

Given the tremendous pressure on both companies to close the deal and start implementing it, they may very well be close to finishing their negotiations despite missing the deadline, said Greg Sterling, of Sterling Market Intelligence. "To some degree time is really an important factor," he said.

Over the past 18 months or so there has been great uncertainty surrounding Yahoo, he said. "Yahoo really suffered a huge brain drain as a result of that uncertainty and lack of focus. You really get the sense that Yahoo has been bloodied by all the contortions and lack of clarity around its strategic direction," he said.

In fact, on Wednesday, Yahoo executives spent the day at an analyst conference "trying to restore confidence across the board," Sterling noted.

Microsoft is under almost equal pressure to get the deal moving, he said. While Microsoft's new search engine, Bing, has seen growth since it launched, that growth has been relatively slow and hasn't had much of an affect on market leader Google. The Yahoo deal is an important strategic move for Microsoft, he said.

It might be a good sign that the companies have not said they are turning to an arbitration panel, per their initial plan, or set a new deadline. "Maybe they're close. Maybe it's a work-over-the-weekend kind of thing," Sterling said.

Yahoo and Microsoft initially estimated it would take them two years to fully implement the deal, which also involves Yahoo providing premium search advertising services for both companies.

The deal is facing an antitrust review by the U.S. Department of Justice. That review can take place even without the companies having finalized their deal because the DOJ is analyzing its broader competitive impact, which it can do based on the details the companies have already provided, Sterling said. Also, the companies were probably keen to have the DOJ begin any investigation as soon as possible so as not to further delay the deal's implementation, he said.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Nancy Gohring

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?