Even though Microsoft Corp. (NASDAQ: MSFT) had a not-so-hot latest quarter, the company still would like to partner with Yahoo! Inc. (NASDAQ: YHOO) for something. Although Microsoft CEO Steve Ballmer no longer wants to acquire Yahoo!'s entire business, you can bet something is brewing between the two companies almost 18 months after a fierce and unsuccessful effort on Microsoft's part to acquire Yahoo!
What would Microsoft want? After all, it has just launched its Bing search (er, decision) engine to great fanfare a few months ago. Bing's market share grew admirable after its release, so would Microsoft want any part of Yahoo!'s search business? Hard to say.
One thing that will be an obstacle -- getting any deal past U.S. regulators. Google Inc. (NASDAQ: GOOG) had this exact problem earlier in the year when it wanted to join up with Yahoo! in a search partnership. Google has the lion's share of the market here, so that possible deal was quashed quickly. At least, Google abandoned it rather quickly because it was set to get quashed.
If both companies want to get serious about competing with Google in the search arena, they need to get going. Google seems to increase its already-huge internet search market share every single quarter (it's well north of 60% now), and it seems virtually impossible for any company to get past Google and make serious money in search (Google is taking in a cool $4+ billion per quarter now).
There would be no other reason for Microsoft to even consider buying Yahoo! except for search -- the two companies have a very similar online set of products and services for the consumer, outside of that which would make an acquisition for anything but search problematic and insane. But someone's got to fight Google for those healthy revenues. No other company has the wherewithal to step up to the plate (or the cash).
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Reader Comments (Page 1 of 1)
7-29-2009 @ 1:35PM
Sri said...
Wow! Finally Microsoft has reached a deal Yahoo for an internet search partnership. Will the newly announced deal between giants Microsoft and Yahoo be a good thing? Got to wait and see. But atleast Microsoft and Yahoo deal is straightforward and not complex at all and ofcourse, the negotiation talks have been going for long. I was just curious to know all the past negotiations between Microsoft and Yahoo so collected all the articles and links (more than 200) related to the current merger and the previous events or negotiations between Microsoft and Yahoo. If you are interested check the link below.
http://markthispage.blogspot.com/2009/07/saga-of-microsoft-and-yahoo-from-2007.html