Microsoft/Yahoo! Deal Needs an Extension

When Microsoft and Yahoo! announced their blockbuster search deal in late July, they said they would need until October 27 to complete negotiations. But with that date already come and gone, the companies have agreed to an extension. They will now continue negotiating in order to reach an agreement that makes sense for both sides.

"Given the complex nature of the transaction, there remain some details to be finalized," a Yahoo! filing with the Securities and Exchange Commission (SEC) reads. "The parties are working diligently on finalizing the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible."

The Microsoft/Yahoo! deal is structured to last for 10 years and should create a solid number-two player in the online search market. Microsoft will provide the back-end search technology for Yahoo!'s search service, while Yahoo! will continue to work on its own UIs and other surrounding services. No money is being exchanged, and the companies are splitting search advertising responsibilities and revenues.

The deal is also undergoing regulatory scrutiny in the United States and Europe. The US Department of Justice (DOJ) is expected to green-light the deal by early 2010. It's unclear what will happen with the European Union (EU), however, given its more aggressive, pro-European policies.