Yahoo! Inc., which is building a regional data center in Lockport, has formed an Internet search partnership with Microsoft Corp. that Yahoo says will lift its annual operating income by about $500 million.

In the long-awaited 10-year deal announced on Wednesday, Microsoft will power Yahoo’s search tool while Yahoo will become the exclusive sales force for both firms’ premium search advertisers.

Under the agreement, Microsoft will license Yahoo’s core search technologies and Microsoft’s Bing will become the exclusive algorithmic search and paid search platform for Yahoo sites.

In addition to increasing its annual operating income, Yahoo said the deal will provide it with $200 million in capital expenditure savings and an annual operating cash flow benefit of $275 million.

In June, Yahoo announced a decision to locate its Northeast data center on a 30-acre site in the Lockport Industrial Park near the Delphi Thermal Systems complex.

The new operation, which includes a 190,000-square-foot structure, could initially employ 125 people, the company said.

Source:

• Biz Journals

It’s unclear whether they brought the requested “boatloads of money,” but several top Microsoft executives are in Silicon Valley to try to finalize a search deal with Yahoo, according to an All Things Digital report late on Thursday.

According to the report, the two sides are “down to the short strokes” after years of excruciatingly well publicized on-again, off-again talks. A deal could come within a week, All Things Digital said.

Included in the Microsoft entourage, according to the report, are three of its top online executives: Yusuf Mehdi, Satya Nadella, and Qi Lu.

Yahoo CEO Carol Bartz said in May that she was open to a search deal if she believed in the partner’s technology and they provided said boatloads of money. Microsoft CEO Steve Ballmer has indicated for more than a year now that he would like to strike some sort of search deal, although he no longer wants to acquire all of Yahoo as the company offered to do in February 2008.

With Microsoft’s Bing getting some good reviews and Microsoft having billions in cash on hand, the ingredients would seem to be in place, if both sides have the will to make it happen.

Source:

• Cnet News