June 13, 2008 / 8:31 PM / 11 years ago

Microsoft sought exclusivity in Yahoo deal: source

NEW YORK, June 13 (Reuters) - A rejected Microsoft Corp (MSFT.O) proposal to Yahoo Inc YHOO.O would have given Microsoft an exclusive 10-year deal to handle Yahoo’s search advertising, a source familiar with the matter said on Friday.

As part of that deal, Microsoft would have guaranteed income payments to Yahoo for only three out of 10 years, the source said.

Yahoo announced on Thursday a non-exclusive search advertising partnership with Google Inc (GOOG.O) after disclosing that talks for a deal with Microsoft had failed to yield an agreement.

A source familiar with Microsoft’s thinking said earlier on Friday that talks with Yahoo centered on a $9 billion transaction to buy a 16 percent stake in Yahoo and its search business. The source said Microsoft’s proposal would have delivered $1 billion in additional annual operating income to Yahoo. (Reporting by Michele Gershberg)

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