A court in New York has upheld an arbitration award requiring Yahoo not to delay the roll out of Bing services in Taiwan and Hong Kong under a 2009 agreement.
Microsoft and Yahoo had agreed to merge their search capabilities to better compete with Google. The agreement provided that Yahoo would migrate its search and search ad services from its Panama search ad platform to Microsoft's Bing Ads. To begin this transition, the global market was divided into sixteen individual geographic markets, according to court records.
The transition to Bing Ads was completed in 14 markets, but was delayed in Taiwan and Hong Kong.
The companies originally agreed to complete the migration in the two markets by 2011, but there were mutually agreed delays because of technical problems. In February 2013, the companies decided on a final plan to transition the Taiwan and Hong Kong markets by the end of October 2013.
On Sept. 20, Yahoo informed Microsoft that it was not proceeding with the transition in the time-frame planned, and "hoped" to proceed with the migration of Taiwan and Hong Kong in early 2014, according to the order Monday by Judge Robert P. Patterson Jr. of the U.S. District Court for the Southern District of New York.
Yahoo is said to have cited concerns about Microsoft's level of commitment to the Bing Ads platform in view of its CEO Steve Ballmer's announcement that he planned to step down sometime before August 2014. Yahoo later said it intended to "pause" the migration in Taiwan and Hong Kong until after Yahoo CEO Marissa Mayer was "able to discuss the partnership with Mr. Ballmer's successor," according to court records.
Microsoft began an "emergency arbitration," and by Oct. 14 the arbitrator issued a decision "that by imposing its pause and refusing to proceed with the scheduled Taiwan and Hong Kong migrations, Yahoo is in breach of the Agreement."
Yahoo and Microsoft could not be immediately reached for comment on the implications of this dispute in the high-profile deal between the two companies.
According to the order by the arbitrator, appointed by the American Arbitration Association, Yahoo is to complete the transition in Taiwan by Oct. 28 and the Hong Kong transition by Nov. 11.