Yahoo signed a 10-year search agreement with Microsoft in 2010.
Yahoo chief executive, Marissa Mayer, said the firm's search collaboration with Microsoft is not giving the revenue boost or improvement in market share the company expected.
Mayer said at the Goldman Sachs Technology and Internet Conference in San Francisco that "one of the points of the alliance is that we collectively want to grow share rather than just trading share with each other."
According to Fox News, Mayer said that they "need to see monetization working better because they know that it can and they have seen other competitors in the space illustrate how well it can work."
In 2010, Yahoo signed a 10-year search agreement with Microsoft in an effort to challenge its rival Google.
Yahoo reported a 2% rise in its revenue to $1.35bn for the fourth quarter of 2012, compared to $1.32bn it reported for the corresponding quarter in 2011.
Last week, Yahoo signed a global agreement with Google for contextual advertisements on some of its websites in order to generate more revenues.
Under the deal, Yahoo will use Google's AdSense for Content and Google's AdMob services to display ads on its various Yahoo Web properties and certain co-branded sites.