Microsoft $400M ’steady-state’ from Yahoo
p2pnet news view | Advertising:- Microsoft is expecting to lose $300 million in the first two years of its advertising deal with Yahoo, but then expects to start earning a “decent return” of “$400 million steady-state”.
So reveals ZDNet in a story which says Microsoft boss Steve Ballmer shared information, “not meant for public disclosure” when a slide was inadvertently, “slipped into a deck he was slated to present to Wall Street analysts attending Microsoft`s Financial Analyst Meeting (FAM) on July 30″.
The news will gall Yahoo investors who are already smarting because they didn’t get any money out of the deal.
Says ZDnet, items spelled out as transition costs include
- Retention costs (pre- and post-close): $90 million
- R&D paid search: $170 million
- GFS (Global Foundation Services)/COGs (Cost of Goods Sold): $145 million
- Sign-on: $150 million
- Algo(rithm) R&D: $70 million
- Advertiser migration: $50 million
“Ballmer said Yahoo got a great deal and is claiming that the deal will result in 70 percent profit expansion for Microsoft`s new partner â in spite of the fact that the market has been less-than-enthusiastic,” it adds.
ZDNet – Yahoo costs: The slide Microsoft didn’t want you to see, July 30, 2009
gall Yahoo investors – Yahoo, Microsoft deal: no `boatload of money`, July 30, 2009
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