Microsoft (NASDAQ: MSFT) said it will hire at least 400 employees from Web Portal Yahoo (NASDAQ: YHOO), as part of the companies’ 10-year Internet search agreement partnership.
Sunnyvale, Calif.-based Yahoo announced last week that some of its employees would be offered jobs at software giant Microsoft, but didn’t provide a specific number. The plan, which was detailed in a regulatory filing with the Securities and Exchange Commission Tuesday, will affect about 3% of Yahoo’s 13,000 employees. Based on the filing the transition and implementation plan for the Yahoo workers will be for a period of no longer than 24 months from the commencement date. Following that date — states the filing — Microsoft will hire not less than 400 Yahoo employees and will offer to transferred employees market competitive compensation packages. Yahoo said its employees would be offered jobs at Microsoft only after the software maker assumes control of the search results and search advertising on Yahoo’s Web site.
The filing also states in relation to revenue share payments, that Microsoft will also pay Yahoo a payment of $50 million annually during the first three years of the 10-year search agreement. The $150 million in guaranteed payments weren’t mentioned last week when the deal was announced. In addition, Yahoo may see its revenue share rate from the partnership increase by 5% to 93% after five years if Microsoft decides to end Yahoo’s sales exclusivity for premium search advertisers. Otherwise, the revenue share rate will be reduced to 83% from 88% for the remainder of the partnership.
The partnership may be terminated by July 29, 2010 for reasons including “mutual consent or if the conditions to commencement have not been satisfied,” though Yahoo has a right to extend the termination date by six months if antitrust approval hasn’t yet been granted, according to the filing.