Microsoft, Yahoo Extend Search Guarantee

Microsoft will continue to pay Yahoo a guarantee to make up for the revenue-per-search (RPS) shortfall stemming from the companies’ 2009 search partnership. The latest year-long guarantee replaces one which expired on March 31, according to a Reuters report, citing Yahoo’s first-quarter filing with the SEC.

Under their agreement, Microsoft promised Yahoo it would earn a set amount for each search, or revenue per search. Since Microsoft hasn’t been able to hit the RPS benchmark, it has been paying the quarterly guarantee to Yahoo over the last four years. The company had previously extended the guarantee in late 2011 until this March.

While search monetization has improved over time through Microsoft’s AdCenter technology, the guaranteed is still needed to cover the RPS gap. Yahoo CEO Marissa Mayer said during the company’s quarterly conference call last month that she wanted to see the search business  grow faster and make it a “more immersive” experience.

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