Microsoft, Yahoo may partner up at last

Ever since the Microsoft-Yahoo merger talks fell through in May 2008, some have been suggesting a search or ad partnership as an alternative. Not even Carl Icahn’s efforts seemed to push things in that direction last summer, but now, Reuters reports that a partnership will finally be announced "within 24 hours." So claims an anonymous source privy to the situation.

The source apparently didn’t reveal too many details, but Reuters paints a fairly clear picture of what’s in store:

Microsoft will not pay an upfront fee to Yahoo, and the focus of the deal is on sharing revenue between the two companies . . . Under the expected deal, Microsoft’s new Bing search engine will power Yahoo’s searches, according to Advertising Age, while Yahoo will handle the advertising sales, using Microsoft technology.

Bing has already grown Microsoft’s search market share since its debut last month, so this partnership could represent an even greater boon. According to the latest ComScore market share figures, Microsoft had 8.4% of the search engine market last month, while Yahoo held 19.6% and Google seized 65%.

On the flip side, regulatory bodies in the U.S. and Europe might throw a damper on the whole thing. Brigantine Advisors analyst Colin Gillis told Reuters that federal regulations could limit "the ability of companies like Yahoo to collect data from users’ searches and share it with partners"—supposedly a "key advantage of the partnership."

Comments closed
    • indeego
    • 13 years ago

    If companies didn’t cut jobs, they would be insolvent, and everyone would suffer, from customers through shareholders. How exactly do you propose companies should respond to a reduction in demand/sales for their productg{

    • BobbinThreadbare
    • 13 years ago

    Yahoo does a lot of other stuff besides searching.

    They have the best fantasy sports, and they have Flicker, and other services that I assume are less used then those.

    • StashTheVampede
    • 13 years ago

    Think of it this way: yahoo is looking to make more money and Microsoft is looking for more positive marketing.

    Yahoo is getting a cut of the Microsoft pie with significant cash on every page view, search, click, etc. Even if Yahoo isn’t powering all of the searches, they are still making money while sticking around as an Internet brand.

    Many TR readers don’t realize that Yahoo/Microsoft have larger footprints in other countries (yahoo and asia, specifically). While it’s clear that most of north America is using google, that isn’t the case in other populated parts of the world. This move isn’t just for Google, but it’s out to hurt other competition in parts of the world where Google is growing.

    • ironoutsider
    • 13 years ago

    Google’s better because it works really well. I practically type out of instinct now. What can Microsoft and Yahoo possibly offer if the search engine I’ve been using has been working great for me up until now? And with a lot less clutter than Yahoo and Bing. That’s one of my problems with their search engines, way too much clutter.

    • indeego
    • 13 years ago

    I just tried yahoo now with a search I just did on google “better greader” and the top result wasn’t relevant to getting the extension directly. And so I’ll stick to another 10 years of using Googleg{<.<}g

    • ironoutsider
    • 13 years ago

    The only true american way of saving money is cutting jobs and healthcare. They can’t be bothered with giving up their material goods. Cmon man, it’s bad business. If people operated their businesses like that and treated people with respect, Wed be in a recession!

    • UberGerbil
    • 13 years ago

    Yabing? Bihoo? Bingo!

    So Yahoo spends less on R&D and MS spends less on S&M, apparently. Will be interesting to see if anybody gets laid off or switches companies as a result of this.

    All three of Google, Yahoo, and MS have been pouring money into geographically dispersed data centers. MS and Google have other uses for these beyond search, since they’re both chasing the elusive “cloud,” but Yahoo has to carry them entirely on the back of search. If Yahoo can close down or hand over the expense of running most of those to MS, they could save quite a bit of money.

    • derFunkenstein
    • 13 years ago

    roughly 1 in 5 people use Yahoo for searching? No wonder nobody can find anything.

    • dermutti
    • 13 years ago

    Why would Yahoo sign up to use Bing?? Hasn’t Yahoo been enhancing its search engine for over a decade? Why would you switch to Microsoft’s when they haven’t been at it as long?

    I haven’t used Yahoo’s search much, so I won’t comment on it. But I have used Bing/Live and never been impressed. It felt to me like they were trying to be “different” since they couldn’t figure out how to be better. Surely, Yahoo’s is better than that??

    • vikramsbox
    • 13 years ago

    This may be a win win situation for MS and Yahoo, although I can’t hep but think that Yahoo will end up being bought up by MS.
    Yahoo has a very mature and popular portal from which the search page has not been divorced. MS can exploit this popularity to get some free cash and yahoo can avoid the explicit competition, and maybe Bing’s algorithm is better than Yahoo’s (yahoo’s search is context based instead of a popularity vote like google’s, but its still cranky).
    I don’t see what the fuss about usage sharing is about- yahoo used Ichtyaki (hope I got that right) and google as its search algorithm engines before google went its own way.

    • swampfox
    • 13 years ago

    Combined they’re 28%, which is much closer to 1/2 of Google…

    • khands
    • 13 years ago

    They will combine and effectively become 1/3 of Google… or something like that.

    • Fighterpilot
    • 13 years ago

    Yes…accepting that and not trying would be much better….

    • SGT Lindy
    • 13 years ago

    Yawn. So what. Both of them apart were trailing so far behind. Now I guess it will be cheaper to trail so far behind?

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