Yahoo MicrosoftAccording to a Reuters report, a negotiating deadline has been extended by Yahoo and Microsoft as they try determining the form their search partnership may take over the next five years.  At the time of the original deal, there were different CEOs.

The original agreement was meant to last ten years, but according the contract, the two parties can either renegotiate or exit from the contract after only five years.  The original contract was signed in 2010 by the companies, and the deadline has been extended from February 23 to roughly the end of April.

Ever since the contract was signed, and is now known as the Search-Alliance by Yahoo and Microsoft, it seems that the results of the expectations has been underwhelming for the companies, especially for Yahoo.  For the last five years, the US search market hasn’t had any real improvement and has remained flat for the past five years, staying between 29 and 31 percent.  Why this seems to be a bad deal for Yahoo is that although Yahoo improvement has remained nil, Bing’s share has grown.

Ever since becoming the new CEO of Yahoo and inheriting the Search-Alliance deal, Marissa Mayer hasn’t been the biggest fan of it and has been critical of the deal.  To her credit, Marissa has had some partial success with reinvigorating search and paid-search advertising at Yahoo outside of the Search-Alliance framework.  One of the most recent successes that Yahoo has seen was the capture of the US “default” search slot from Google on Firefox, as well as a bump in market share.  But much to the company’s dismay, some of that captured share has now been given back.

Despite the issues surrounding the deal between Microsoft and Yahoo, there’s a good chance that the deal won’t be completely abandoned.  If it was, there would be millions of dollars spend to recreate what already exists before Yahoo turned search over to Microsoft.  Plus, it wouldn’t look very good to the investors either.

So what does this mean for deadline extension?  At this point, it isn’t clear.  During the time before the end of April, w will probably see some new details and different terms emerge in the relationship between Yahoo and Microsoft.

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