Analyzing Yahoo's (YHOO) distribution deal with HP (HPQ)

By Yaser Anwar, CSC of Equity Investment Ideas

Yahoo and HP partner to offer Yahoo search and services

Yahoo and HP announced a partnership to offer easy and customized access to Yahoo search and services on HP consumer desktop and notebook PCs. The agreement covers North America and Europe. HP is the number two global PC vendor.
Terms vary by region- covers start page, toolbar, & IE

Beginning immediately, HP computers sold in NA will come preloaded with a co-branded toolbar and Yahoo will be set to the default search engine in the next version of Internet Explorer .


In Europe, HP computers will come preloaded with a default Yahoo start page. Europe will not get the co-branded toolbar or Yahoo IE default, and North America won't get the custom start page.
Deal Implications

As with previous deals (Google & Dell, Yahoo & Acer), I believe the deal involves both revenue sharing as well as per-install fees.


While investors should be encouraged to see Yahoo aggressively pursue distribution, the economic impact remains uncertain. Given the likely costs, it is now even more imperative that Panama is on time.

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