Microsoft and Yahoo! have gone official about their search deal which we reported earlier today. It’s a long term alliance between two search giants spanning 10 years that allows Microsoft to acquire Yahoo!’s core search technologies and use it into their existing web platforms.
As known before, Yahoo! will handle the premium ad sales while the ads will be delivered via Microsoft’s AdCenter platform. Both the companies will work on a revenue-sharing agreement wherein Microsoft will pay Yahoo! 88 percent of search revenue generated from Yahoo!’s own and affiliate sites for the first five years.
After the customary regulatory approval, Yahoo! estimates to have a GAAP operating income of $500m, Capex savings of around $200m and annual operating cash flow of approx. $275m.
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