Biz, Tech: Steve Ballmer: Investors are missing the MS/Yahoo deal’s benefits
- Yahoo gets 88% of the search revenue they have today. They have 0% cost of goods sold against 88% revenue and they have no [research and development] expense and no ongoing [capital expenditure].
- Microsoft CEO Steve Ballmer • Explaining the benefit Yahoo gets for agreeing to letting Microsoft’s Bing power their searches. Some were disappointed that Yahoo didn’t get an upfront payment as part of the agreement, causing Yahoo’s stock to tumble while the rest of the market is doing relatively well. Ballmer explains that the benefit for Yahoo will be down the line when they don’t have to invest in search development. • source