- Associated Press - Wednesday, September 1, 2010

SUNNYVALE, CALIF. (AP) - Yahoo Inc. is about to lose one of its search advertising partners in South Korea as the Internet company prepares to convert to Microsoft Corp.’s technology.

NHN Corp. in South Korea will stop relying on Yahoo’s search ads when its current contract expires in November, according to a Wednesday filing with the Securities and Exchange Commission.

Although NHN’s Naver search engine handles about 65 percent of the search requests in South Korea, Yahoo said the advertising revenue from the deal contributed to less than 1 percent of its gross profit of $1.8 billion during the first half of this year.

It marks Yahoo’s second setback in the international search market this summer. Yahoo Japan Corp., which operates independently, is shifting its search engine over to Google Inc.’s technology.

NHN plans to rely on its own technology beginning in November, according to the Securities and Exchange Commission filing.

Yahoo itself is preparing to switch over to Microsoft’s search advertising service in the U.S. as part of a 10-year partnership between the two companies.

Microsoft’s Bing search engine last week began to provide the main search results on Yahoo’s U.S. website. Yahoo is taking more time before it begins to rely on Microsoft for the ads that appear next to search results because it wants to ensure the system will be able to handle the marketing blitz that usually occurs during the holiday shopping season.

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