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Microsoft to Hire 400 Yahoo! Workers, Assure Revamp with $150 Million Guarantee

Strategic Insights

— 1 min read

Microsoft's proposed acquisition of Yahoo!'s search business is set to create hundreds of new jobs, with at least 400 current Yahoo! employees to be offered positions at the tech giant. The numbers emerged in a regulatory filing Tuesday that provided more details on the agreement announced last week. The deal, pending approval from antitrust regulators, aims to revamp Yahoo!'s online operations, reducing the Sunnyvale-based company's payroll by about 3 per cent and allowing it to save money on technology.

Key Takeaways:

  • Microsoft will hire at least 400 workers from Yahoo! if the deal is approved, with those employees switching to Microsoft's payroll.
  • Yahoo! will receive $150 million as part of the deal to cover any unexpected costs associated with the transition to new technology.
  • Microsoft will pay Yahoo! $50 million annually for the first three years of the contract to supplement ad revenue.
  • Yahoo! will receive 88 per cent of the search ad revenue during the first five years of the partnership, and the commission will range from 83 per cent to 93 per cent thereafter.
  • The main reason Yahoo! decided to partner with Microsoft was to save money on technology investments.
  • Microsoft has the option to integrate its online mapping service, replacing Yahoo!'s current offering.

Statistics:

  • 400: Number of Yahoo! employees to be offered positions at Microsoft.
  • 15 per cent: Drop in Yahoo!'s stock price since the deal was announced.
  • $150 million: Amount guaranteed to Yahoo! as part of the deal to cover unforeseen transition costs.
  • $50 million: Annual payment to Yahoo! from Microsoft for the first three years of the contract.
  • 88 per cent: Percentage of search ad revenue to be received by Yahoo! during the first five years of the partnership.
  • 3%: Reduction in Yahoo!'s current payroll if 400 workers are pruned.
  • 93,000: Number of Microsoft employees at the end of its latest fiscal year in June.
  • 2,000: Increase in Microsoft employees from the previous year.
  • 30 per cent: Combined market share of Microsoft and Yahoo! in the U.S. search market.
  • 65 per cent: Market share of Google in the U.S. search market.

Sources:

  • [The Associated Press]
  • Yahoo! Inc.
  • Microsoft Corp.
  • comScore Inc.

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