Yahoo, Microsoft Amend Search Agreement

Yahoo Inc. and Microsoft Corp. have updated their search partnership to allow more flexibility in how the results are presented and how the advertising teams are managed.

The news comes after months of negotiation over a deal that has caused friction between the two tech giants. Shares of Microsoft were down less than 1% in premarket trading, while Yahoo shares were up less than 1%.

The new terms update the original 2009 agreement, created by the predecessors to the current chief executives, Microsoft's Satya Nadella and Yahoo's Marissa Mayer.

Under the original 10-year agreement, Microsoft provided search services on computers for Yahoo, and paid Yahoo a percentage of Bing revenue delivered from the latter company's searches. Microsoft controls the technology underpinning searches across both companies' sprawling universe of websites. Yahoo at times has chafed at elements of the partnership, which generates 37% of its revenue.

Now, Yahoo will have increased flexibility on how the results are presented on desktops and mobile devices. Yahoo, though, will continue serving Bing ads and results for a majority of its desktop search traffic.

Microsoft also will become the exclusive sales force for ads for Bing, while Yahoo will be the exclusive sales force for its Gemini ads.

Both will then integrate the sales teams with the engineering teams, which "will allow both companies to service advertisers more efficiently, " the companies said. That transition will occur this summer.

Representatives for both companies weren't immediately available for further comment.

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