CEO Marissa Mayer Says Yahoo-Microsoft Search Deal Is Underperforming

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Yahoo’s search deal with Microsoft is underperforming, CEO Marissa Mayer said during an appearance at the Goldman Sachs Technology and Internet Conference in San Francisco on Tuesday.

The deal has not delivered the market share gains or revenue boost that was expected, Mayer said. Yahoo and Microsoft inked the 10-year search partnership in 2010 as part of an effort to challenge Google. But Google retained a 66.7 percent share of the U.S. market as of December, almost the same as its 66.6 percent share two years ago, according to ComScore. Microsoft lagged behind with a 16.3 percent share and Yahoo had 12.2 percent.

“We need to see monetization working better because we know that it can and we’ve seen other competitors in the space illustrate how well it can work,” Mayer said of the partnership. She added that, though the alliance hasn’t made a dent in Google’s chunk of the market, Bing.com has taken share away from Yahoo Search. Another challenge for Yahoo is that its search market is primarily based in the U.S., and Mayer hopes to see growth in the U.K. and Germany. Though her company has pondered selling Yahoo Japan in the past, Mayer implied that it will hold onto that property for a little while longer because Japan is “just such a rich market in terms of advertising… that it’s important that we play there.”

“One of the points of the alliance is that we collectively want to grow share rather than just trading share with each other,” Mayer said of the deal, adding that Yahoo plans to grow impressions by trimming its roster of mobile apps from 60 to about a dozen, and getting consumers to spend more time on Yahoo’s websites to boost its ad revenue.