Yahoo! Posts New 52-Week High After Microsoft Renews Search Revenue Deal

The 2009 agreement between Yahoo! Inc. (NASDAQ: YHOO) and Microsoft Corp. (NASDAQ: MSFT) is scheduled to run for 10 years, but the agreement contains provisions to allow the two companies to make changes to the revenue that Microsoft pays to Yahoo! for each search. Microsoft has agreed to extend its revenue per search (RPS) Guarantee with Yahoo! for another 12 months, beginning on April 1st this year.

The announcement was included in Yahoo!'s Form 10-Q filed with the Securities and Exchange Commission today.

The deal between the two companies was a consolation prize for Yahoo! shareholders who were still smarting from management's decision to turn down a buyout offer worth about $33 a share from Microsoft. Even though Yahoo! realizes significant revenue from the search agreement, the company has given up its own search technology to Microsoft for what amounts to far less than Microsoft's 2008 buyout offer. Spilled milk.

Shares of Yahoo! closed up 3.6% today at $26.07 after posting a new 52-week high earlier and are inactive in after-hours trading. The stock's new 52-week range is $14.59 to $26.79.

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