24/7 Wall Street is reporting that online search engines Microsoft (MSFT) and Yahoo (YHOO) are once again in serious negotiations regarding a partnership for the lucrative online search business. You may recall the two companies were in negotiations for almost two years with Microsoft finally attempting a takeover bid of Yahoo which ultimately failed and Yahoo turning towards Google for a partnership agreement.
This time around however, things seem serious with reliable sources of a client at the investment house ThinkEquity indicating that a deal is “imminent”.
The online rumor is that under the terms of the agreement, Yahoo will receive an upfront cash payment of $3 billion dollars and 110% of the revenue generated from search traffic for the first two years, which will then drop to 90% in year three.
Should this deal go through, both search engines are likely to benefit as Yahoo reduces development and personnel costs as well as taps into new revenue streams, while Microsoft on the other hand can increase their search traffic by 30% for their new online search engine Bing.
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