Yahoo / Microsoft: Let the Filing Begin - Some Early Details

Yahoo Inc.'s (NASDAQ:YHOO) Form 8-K filing with the SEC provides some details of the search and advertising deal with Microsoft Corp. (NASDAQ:MSFT), including payments, reasons for termination and employment issues.

Two tidbits: Microsoft will pay Yahoo $50 million a year for the first three years of the search agreement. And Yahoo may terminate the agreement if the combined companies' revenues-per-search or query market share falls "below a specified percentage of Google Inc.'s."

The 8-K also gives a heads-up to Yahoo's 1,300 staffers who are anxiously awaiting any news about their future employment.

Microsoft will hire not less than 400 Yahoo employees (the "Transferred Employees") and will offer the Transferred Employees market competitive compensation packages. In addition, Yahoo and Microsoft will mutually agree on a retention plan to be paid for by Microsoft to assist in retaining the Transferred Employees and an additional 150 Yahoo employees to be mutually agreed upon between Microsoft and Yahoo to assist with providing the transition services.

"Yes, there are certainly many Yahoo search employees that will be asked to take jobs at Microsoft as they integrate the technology," Yahoo CEO Carol Bartz told reporters after the deal was announced. "And then unfortunately there will be some redundancies in Yahoo. ... There will be redundancies; it just is in the future."

Some of the key players have a head start, as Microsoft has been poaching Yahoo executives for awhile now, including Qi Lu, who had been executive vice president of engineering for the search and advertising technology group at Yahoo, and is now president of the online services group at Microsoft.

Bartz and Microsoft CEO Steve Ballmer argued in an interview with BusinessWeek last week that the cross-pollination will help with the execution of the agreement.

But integrating the work forces of Microsoft and Yahoo will present many challenges, not the least of which may be a corporate culture clash when the Yahooligans leave Silicon Valley for the Seattle area.

Writes John Furrier from the tech blog SiliconAngle:

"Microsoft has a super-competitive culture. They live to destroy the competition. The Yahoo culture has been inclusive, accommodating, indecisive, never really uber-competitive."

For more on the IT integration challenges ahead, see this post on our sister blog, Corporate Dealmaker.

The 8-K -- a form the SEC requires public companies to fill out "to announce major events that shareholders should know about" within four business days -- is just one of many SEC forms Microsoft and Yahoo will be filing in the weeks and months ahead, as the deal will face intense scrutiny on the regulatory front, especially with an eye to potential antitrust violations. - Mary Kathleen Flynn

Comments

[jacklovesbeer:]

If you want to get Bing & Yahoo results on the same page use infospace.com. You get Google, Ask and Twittter results too.

Aug 05 02:35 PM