Microsoft has provided the default search results for Yahoo for the last several years. This deal predates Yahoo’s new CEO Marissa Mayer significantly. Recently Mayer said that the search partnership between Microsoft and Yahoo was not delivering the sort of gains in market share or the type of revenue that the partnership should deliver. Mayer specifically said that Yahoo wants collective growth rather than just trading share with Microsoft.
Mayer made these comments during an investor conference, which happened to be the first one she attended since becoming CEO of the company in July of 2012. She also noted that she plans to shed some of the mobile apps that Yahoo currently offers and hopes to draw customers in and have them spend more time on Yahoo’s online sites.
If the users spend more time on Yahoo Web properties, Yahoo can show them more ads and generate more revenue. Yahoo posted approximately $5 billion in revenue during 2012, which was flat compared to 2011. The $5 billion was a significant decline from the $6.3 billion in revenue Yahoo posted 2010.
The search deal between Yahoo and Microsoft spans 10 years and started in 2010. Google continues to dominate the search landscape with 66.7% of the United States search market. By comparison Microsoft has only 16.3% of the market and Yahoo has 12.2%.