What will happen if Bing & Yahoo search deal doesn't gets renewed and Google also does not allow Yahoo to use Google search ? How will yahoo index all un-indexed data & are yahoo engineers still developing Yahoo Search Algorithms?

That's about as likely to happen as the Sun rising in the west.

Let's look at some data before we jump into the questions. When we compare the market share after the deal in 2009, we can see that Yahoo's search market share has declined throughout the years and shows a tendency of switching market share with Bing. This doesn't look good for Yahoo, as its core business are search and display ads, which are closely related. If its market search declines, Yahoo would mostly likely see a decline in ad revenue too. So we can conclude that the Yahoo-Microsoft deal was a wrong move. Marissa Mayer has also shown her dissatisfaction towards the deal recently. We need to see monetization working better because we know that it can and we’ve seen other competitors in the space illustrate how well it can work. One of the points of the alliance is that we collectively want to grow share rather than just trading share with each other. So answering your questions. We can easily come to a conclusion that Yahoo would built its own unique search technology. It has been reported that Yahoo has started two new projects named "fast break" and "curveball", which mainly focus on developing Yahoo's own search engine. Meaning that Yahoo has the search indexes, it is impossible to start the projects without the data. Yahoo wants not only the control over the search experience, but also the whole search technology. This way it could deliver something that's different from its competitors and attract new users. Yahoo has also reached a deal with Yelp that to show the online reviews in local searches and provide more personalized content in order to enhance its competence with other search providers. This helps Yahoo to generate more ad sales to increase its revenue. Source: http://techcrunch.com/2013/02/12/ceo-marissa-mayer-says-yahoo-microsoft-search-deal-is-underperforming/