The extension surprised some Wall Street analysts, who had expected Microsoft to drop Inktomi. MSN rival Yahoo in December agreed to acquire Inktomi for $235 million as a way to strengthen its search offerings. Yahoo executives have touted the deal as a way to beef up their company's paid-inclusion business and to improve the general Web searches on its site.
Inktomi has lengthened its arrangement to provide search results for Microsoft's MSN Web portal, quashing speculation that the software giant would scrap the deal out of competitive concerns.
Earlier in February, Microsoft extended its agreement for Inktomi to provide Web search services through December 2005, according to a Feb. 14 filing with the Securities Exchange Commission. The filing added that MSN contributed $5.6 million in revenue to Inktomi during the December quarter, $5.1 million of it indirectly through paid inclusion and $500,000 in licensing fees.
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