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Microsoft/Yahoo Merger to Take on Google?

Mz6 writes "One faction within Microsoft is promoting a bold strategy in the company's battle with Google: Join forces with Yahoo. That would be a major departure for Microsoft, the software maker that is legendary for toiling on its own until it captures a new market. However, people familiar with the situation say that Microsoft has considered the idea of acquiring a stake in Yahoo, and that the two companies have discussed possible options over the course of the past year. Currently, talks of an equity stake in Yahoo don't appear to be active, given that Microsoft is focusing on a reorganization that it hopes will re-energize its effort to compete with Google. Two wild cards remain: Steve Ballmer, who has historically shunned large acquisitions, and Yahoo co-founder Jerry Yang, whose support would be key to bringing the necessary Yahoo shareholders on board for a deal. Mr. Yang and others in Yahoo would be hard-pressed to sell to Microsoft, people close to the company say. However, people familiar with Microsoft say its top management remains open to a deal with Yahoo as pressure grows to perform better against Google. The increasing pressure on Microsoft -- not just from Google, but also from its own shareholders, as well as from advertisers that want an alternative to Google -- could help to justify the acquisition or some kind of business collaboration, these people say."

43 of 183 comments (clear)

  1. Well... by metamatic · · Score: 3, Insightful

    I guess it would focus the evil in one place.

    --
    GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
    1. Re:Well... by Basehart · · Score: 2, Funny

      "I guess it would focus the evil in one place."

      Yeah, Yahoo certainly has the right stuff!

    2. Re:Well... by sgt_doom · · Score: 2, Funny
      WOW!!!

      They could give up twice as many dissidents to Chairman Hu and China's Department of Public Security.

      Another plus in the Global War on Terror!!

    3. Re:Well... by diersing · · Score: 2, Funny

      How many bars (Google Bar, Yahoo Bar, etc) does it take for IE to get the center of a tootsie roll tootsie pop?

  2. No mention of a merger in the article text. by Whiney+Mac+Fanboy · · Score: 5, Informative

    Summary is a troll - there is no mention of a 'merger' in the article text, just cooporation

    Here is the article, so you don't have to sit through the silly flash into:

    A Microsoft, Yahoo Tie-Up?
    MSN Veterans Want a Pact
    To Bolster Web-Search Ads
    And Better Challenge Google
    By ROBERT A. GUTH and KEVIN J. DELANEY
    May 3, 2006; Page C1

    One faction within Microsoft Corp. is promoting a bold strategy in the company's battle with Google Inc: Join forces with Yahoo Inc.

    That would be a major departure for Microsoft, the software maker that is legendary for toiling on its own until it captures a new market. However, people familiar with the situation say that Microsoft has considered the idea of acquiring a stake in Yahoo, and that the two companies have discussed possible options over the course of the past year.

    Currently, talks of an equity stake in Yahoo don't appear to be active, given that Microsoft is focusing on a reorganization that it hopes will re-energize its effort to compete with Google, the fast-growing provider of search services and advertising.

    Two wild cards remain: Microsoft Chief Executive Steve Ballmer, who has historically shunned large acquisitions, and Yahoo co-founder Jerry Yang, whose support would be key to bringing the necessary Yahoo shareholders on board for a deal. Mr. Yang and others in Yahoo would be hard-pressed to sell to Microsoft, people close to the company say.

    However, people familiar with Microsoft say its top management remains open to a deal with Yahoo as pressure grows to perform better against Google.

    The increasing pressure on Microsoft -- not just from Google, but also from its own shareholders, as well as from advertisers that want an alternative to Google -- could help to justify the acquisition or some kind of business collaboration, these people say.

    Since 2004, Microsoft has invested heavily to better compete with Google but it has yet to boost its share of search or online advertising. At the same time, Google has released products that some industry experts say could over time eat into Microsoft's core software businesses.

    Microsoft executives say that they are investing for the long haul, and that the online-search market is still nascent and has much room for growth. A Microsoft spokesman declined to comment. A Yahoo spokeswoman declined to comment, saying the company doesn't discuss "rumors and speculation."

    In one sign that Microsoft may be serious about major acquisitions, it has hired search-industry executive Steve Berkowitz to head MSN, the Internet unit that is building the Web-search business and is leading Microsoft's charge against Google, including Web search. Mr. Berkowitz, the former chief executive of search site Ask.com, is viewed as a likely deal maker at MSN, having completed more than 40 acquisitions in his career, according to a person close to the matter. He starts May 8. Mr. Berkowitz couldn't be reached for comment.

    Microsoft's recent quarterly results provided a picture of the pressure it faces from Google. On Thursday, Microsoft said the MSN unit fell into the red and its revenue declined. Those numbers show it is failing to capture the same online-advertising tail wind that is helping Google. By contrast, Google's first-quarter net income rose 60% from a year earlier to $592 million. U.S. online advertising generally rose 30% to $12.5 billion last year, according to the Interactive Advertising Bureau trade group and consulting firm PricewaterhouseCoopers.

    Microsoft executives also said they will need to boost investments in online businesses in the next fiscal year to levels far higher than Wall Street had expected. That prompted an 11% selloff of Microsoft shares Friday. The stock has ticked lower this week. In 4 p.m. Nasdaq Stock Market composite trading, shares fell 1.2% to $24.01, after hitting a 52-week low during the day of $23.90.

    At its core, the clash between Microsoft and Google centers on Microsoft's attempt to build up its We

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    1. Re:No mention of a merger in the article text. by TopShelf · · Score: 2, Informative

      Mod Parent up - just because one company takes an equity stake in another, that doesn't constitute a merger.

      --
      Stop by my site where I write about ERP systems & more
  3. Isn't Yahoo! associated with Google ? by lord_rob+the+only+on · · Score: 3, Informative

    If I remember correctly, Yahoo! search engine used Google technology.

    1. Re:Isn't Yahoo! associated with Google ? by Whiney+Mac+Fanboy · · Score: 5, Informative

      If I remember correctly, Yahoo! search engine used Google technology.

      Yahoo used Google results for its searches between October 2002 & Feb 2004. They have used their own search engine (acquired with their purchase of Inktomi in 2003) ever since.

      Read all about it at Search Engine Watch

      There's definitely a difference for some searches (and both are superior in my experience to MS's offering)

      --
      There are shills on slashdot. Apparently, I'm one of them.
    2. Re:Isn't Yahoo! associated with Google ? by sbrown123 · · Score: 5, Insightful

      Ignore the bullcrap you are hearing. Apparently there are a bunch of analysts out there who are pissed off that Google didn't acquire company X when they said they would. So, to keep their "insider" title they are releasing more steaming piles of wild guesses such as "eBay will join Microsoft" or "Amazon set to deal with Microsoft". One common line I am seeing is that they keep pointing to Microsoft to merge with someone else to do something about Google. The only thing I can guess is that these "insiders" probably have some Microsoft stock and are hating the recent decline due to Vista delays and advertisers flocking to Google. Screw em and don't pay these people mind.

  4. It's a Trick!!! by sesshomaru · · Score: 5, Funny
    As Ash would say, "It's a Trick!!!" When Microsoft goes to companies and says, "Hey, why don't we make a strategic partnership against our common enemies?" they actually mean, "Hey, we'd like to steal your technology and run you out of business."

    Farewell, Yahoo! a flight of angels sing thee to thy rest!

    --
    "MIT betrayed all of its basic principles."
    1. Re:It's a Trick!!! by Anonymous Coward · · Score: 2, Insightful

      Wow. That's a incredibly shallow way to look at it.

      Google isn't just a search engine. Ever heard of Google local? Google maps? GMail? Google Desktop Search? Ad$en$e? ... (Can't resist to put the $ ala M$ - after all, we're talking big $$$, no?)

      And microsoft also offers most of these things (Google search -> MSN; GMail -> hotmail; GDS -> MSN Desktop Search; Google maps -> Virtual Earth/Terraserver; and Microsoft's working on a advertizing program ala adsense IIRC...

      Even if google doesn't make OS'es or office suites, they both compete against each other in a LOT of [overlapping] fields. And google does fund some of Microsoft products' competitors (like Firefox - competiong against IE).

      There's FAR more to it than just a "search engine". And as far as search engines go, google may have been king for a while, but I'm thinking this may change soon. Their results have been very much downhill lately (IMHO). Every time I search for something, half of what it finds is links to expired ebay auctions, onlines stores that sells the product (newegg/amazon/bhphoto/...) and often has none of what I'm looking for, tons of pages of linkfarms and other crap (like a bunch of crappy unrelated blogs). Come to think of it, I just may try MSN today... (Not that I like MS, MSN, passport or all that crap, but I want good search results, and google is starting to deceive and seemingly isn't doing anything about it - other than perhaps cry "but MS will use their own search engine by default for their own software!" - oh wait. That isn't helping their results... If their results are good, people will come - no need to resort to crying like that. Google, get working on fixing your results already.

    2. Re:It's a Trick!!! by killjoe · · Score: 2, Insightful

      What's amazing to me is that people still actually cosider partnering up with MS. After all the partners they stabbed in the back you'd think people would wise up.

      --
      evil is as evil does
  5. Google = Dead Engine Walking by bigtallmofo · · Score: 2, Interesting

    With apologies to all the Google fans out there, the Internet has changed the top search engine several times in the past and it will change it again.

    Just about every Internet veteran company has now recognized Google for the threat it is and has declared an all out war against them. Basically, it's Google against everyone. In such cases, everyone usually wins. Unfortunately for Google, they should expect many more actions like IE7 having a default search bar just like FireFox, only defaulting to pointing to MSN Search.

    Sorry, Google - it was fun while it lasted.

    --
    I'm a big tall mofo.
    1. Re:Google = Dead Engine Walking by strider44 · · Score: 4, Insightful

      So what? Google's more than just a search engine - it's a huge advertising firm that just happens to create some neat software. A company as big as Google doesn't just die. Besides, I think that you're full of crap, not just because there'd be a huge antitrust spat if IE had a non-changable lock to msn search, but also because you don't MSN Search something, you Google it. That's not going to change anytime soon.

    2. Re:Google = Dead Engine Walking by mgblst · · Score: 2, Funny

      Apology accepted, please don't do it again.

    3. Re:Google = Dead Engine Walking by TopShelf · · Score: 2, Informative

      I don't believe the search issue with IE7 is non-changeable, just that the default is set to MSN. Microsoft would then have a stranglehold on users who are too inept to select their own search engine....

      --
      Stop by my site where I write about ERP systems & more
    4. Re:Google = Dead Engine Walking by Whiney+Mac+Fanboy · · Score: 5, Funny
      hahahahaha - this is bigtallmofo's comment in 1986:
      With apologies to all the microsoft fans out there, the software industry has changed the preferred O/S vendor several times in the past and it will change it again.

      Just about every O/S company has now recognized microsoft for the threat it is and has declared an all out war against them. Basically, it's microsoft against everyone. In such cases, everyone usually wins. Unfortunately for microsoft, they should expect many more actions like IBM PC's being distributed with PC-DOS by default.

      Sorry, microsoft - it was fun while it lasted.
      --
      There are shills on slashdot. Apparently, I'm one of them.
    5. Re:Google = Dead Engine Walking by drinkypoo · · Score: 3, Informative

      Which is exactly how it is in IE6, so how is that any different from right now? Answer: It isn't.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  6. not to be a prick, but... by cultrhetor · · Score: 3, Interesting

    Does anyone else find it ironic that M$ is partnering with Yahoo! given the recent post concerning Yahoo's shady partnership with spyware companies, especially considering that IE's security holes are one of the reasons that spyware got so bad, so fast? A match made in heaven...

    --
    "Tu fui, ego eris" - Virgil
  7. New Name by MikeMacK · · Score: 4, Funny

    Yeah, they could call themselves Ya'soft - they could sell Viagra too.

    1. Re:New Name by n__0 · · Score: 2, Funny

      "Ya'soft, Micro?" would (pardon the expression) enlarge the pills they could sell further

    2. Re:New Name by KingJoshi · · Score: 3, Funny

      I guess we should be thankful Microsoft didn't join forces with Nintendo in the console business. They would've released Micro Wii.

      --
      In times like these, it is helpful to remember that there have always been times like these. - Paul Harvey
    3. Re:New Name by owlnation · · Score: 2, Funny

      or Micro Hoo? and sell penis enlargement..

  8. Yahoo will loose.. by Virtual+Karma · · Score: 2, Insightful

    In this deal Yahoo will probably loose more than Microsoft will gain.

  9. One of my favorite qoutes by plopez · · Score: 4, Insightful

    I think from Woody Allen (cue lame off topic Woody Allen jokes):
    "The lamb may lay down with the lion, but the lamb won't get much sleep at nights".

    Considering MSs history of screwing its partners, Yahoo would be insane to 'partner' with MS.

    --
    putting the 'B' in LGBTQ+
  10. Ballmer hears a Yahoo by Billosaur · · Score: 4, Funny
    Two wild cards remain: Microsoft Chief Executive Steve Ballmer, who has historically shunned large acquisitions, and Yahoo co-founder Jerry Yang, whose support would be key to bringing the necessary Yahoo shareholders on board for a deal. Mr. Yang and others in Yahoo would be hard-pressed to sell to Microsoft, people close to the company say.

    I can't see this happening, precisely for this reason. Ballmer's ego wouldn't let him co-exist with Yahoo and Yang wouldn't be caught dead letting Ballmer in the building. Eventually it comes down to which one would flinch in a staring contest, but I suspect they'd both go blind before agreeing to work with the other.

    --
    GetOuttaMySpace - The Anti-Social Network
  11. What planet is the summary from? by MarkusQ · · Score: 4, Insightful

    That would be a major departure for Microsoft, the software maker that is legendary for toiling on its own until it captures a new market.

    Huh? This is just plain not true.

    1. Microsoft frequently "partners" with others (e.g. MSNBC). What they are famous for isn't refusing to partner, but rather turning on their partners and destroying them the moment it becomes to their advantage to do so.
    2. What new Markets has Microsoft captured exactly? IIRC, most of their attempts to go beyond their core competence have been costly failures.

    --MarkusQ

    1. Re:What planet is the summary from? by Braino420 · · Score: 2, Interesting

      Ya, I caught that too. Legendary for toiling on their own?! What product do they have that they have completely developed by themselves? There could be one or two, but that definately doesn't make them "legendary" for doing their own work. When they were getting into the console market, I heard that they tried to buy Nintendo(wouldn't be surprised if it's true).

      Hell, the company was founded on the idea of ripping off other people's work.

      --
      They call me the wookie man, I guess that's what I am
    2. Re:What planet is the summary from? by zataang · · Score: 2, Insightful

      > What new markets captured? XBoX? Palm? MSN? Haven't all these been late starts? And despite being mostly a MS basher, I think MS has captured significant market share in these domains.

    3. Re:What planet is the summary from? by Anonymous Coward · · Score: 2, Informative

      What new Markets has Microsoft captured exactly? IIRC, most of their attempts to go beyond their core competence have been costly failures.

      Hmmm, I'll take a stab at that: IDEs (Visual Studio is the standard - there is not even a close second), Office (ditto, the "competitors are so far in the rearview mirror it isn't funny), Browsers (85% market share - yah, I know, monopoly), Small Database Servers (>50% market share), Smartphones (leading and getting stronger), Handhelds (remember Palm?), XBOX (ok, they're second here, but it's early yet and they have momentum), Content delivery (most of the digital music services run MS backends and use MS codecs and DRM). I won't mention OSes (90+% desktop share, ~50% server share) because arguably that is their core competence. Add to that, MSN is competitve, they have a nice hardware business - their keyboards and mice do very well thankyou, they are a player in the home finance business (MS Money), they are competitive in the home digital darkroom market (ok, on the low end, but they enjoy good volumes here), and they have a number of successful gaming titles.

      I really think it is a gross exageration, or wishful thinking, to say that they have had nothing but costly failures.

  12. Antitrust concerns? by rkhalloran · · Score: 2, Insightful

    Even given this administration's please-bend-me-over attitude towards business, I can't imagine a deal of this sort wouldn't draw some attention from the DOJ. And with their EU counterparts already looking to drop a half-billion-Euro fine on MSFT, something like this would only encourage them to take a hard line.

    Then there's the problem that MS has traditionally managed to fsck up most companies they've partnered with, so why would Yahoo willingly get themselves into that situation?

  13. Microsoft always goes it alone? by xxxJonBoyxxx · · Score: 4, Informative
    "That would be a major departure for Microsoft, the software maker that is legendary for toiling on its own until it captures a new market. "

    Dunno if I buy that. See:

    http://dondodge.typepad.com/the_next_big_thing/200 5/10/microsoft_will_.html
    "QDOS became MS-DOS, ForeThought became Powerpoint, SoftDesign became Microsoft Project, Vermeer became FrontPage, PlaceWare became Live Meeting, Vicinity became a key part of MapPoint, nCompass Labs became Content Management Server, Bungie Studios became Halo, HotMail, Visio, Great Plains, Groove Networks"

    Or...
    http://www.computerworld.com/softwaretopics/os/win dows/story/0,10801,78739,00.html
    http://www.microsoft.com/presspass/features/2005/m ar05/03-10GrooveQA.mspx
    http://www.networkworld.com/news/2005/021405-micro soft-sybari.html

    1. Re:Microsoft always goes it alone? by Otter · · Score: 3, Interesting

      They buy, develop and market technologies; they don't typically buy established players for their market share. Hotmail and WebTV are the only two cases I can think of where Microsoft did that.

  14. Re:developers! by PinkyDead · · Score: 5, Funny

    Ballmer: I'm gonna fucking kill Yahoo!
    Shareholders: No, Steve - "Merge With"
    Ballmer: (Confused Expression) Er-ugh...
    Shareholders: M-er-ge w-i-th
    Ballmer: (Picks up chair - smiles)
    Shareholders: No, Steve - M-eh-her-ge w-i-i-th-h.

    --
    Genesis 1:32 And God typed :wq!
  15. wall street reply by mapkinase · · Score: 2, Insightful

    YHOO +10%
    GOOG - no change

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    I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
  16. Toiling on it's own!? by psbrogna · · Score: 2, Insightful

    It was always my understanding that many of their pieces/parts have a non-MS lineage. For example: CPM begat MS-DOS, Mosaic begat IE, Sybase begat MS SQL, Hotmail begat... well, MS Hotmail. I've heard (unconfirmed) that their TCP/IP stack wasn't exactly home grown either.

  17. Why is it always "Big Company vs. Big Company"? by TheLoneGundam · · Score: 2, Insightful

    Why do people seem intent on pitching these companies against each other? Aren't they ALL making money? What's the matter - dividends are too small? Stock didn't ramp up 100% in 7 days? Didn't make a billion dollars overnight? These days, when people talk about a company "not growing" what they really mean is "I invested to ride the stock price rocket, damnit, not to wait and collect my share of the profits" - and I think this constant Micrsoft-killer, Google-killer kind of crap is related to that.

  18. Rules of Acquisition by NullProg · · Score: 2, Funny

    It seems that Steve and Bill have forgotten rules of acquisition. http://www.sjtrek.com/trek/rules/

    #52: Never ask when you can take.

    and

    #218: Always know what you're buying.

    Enjoy,

    --
    It's just the normal noises in here.
  19. Re:Huh? by mosburger · · Score: 2, Insightful

    Pssst... SQL Server was purchased from Sybase. http://en.wikipedia.org/wiki/Sybase

  20. If this is true. . . by jafac · · Score: 2, Insightful

    If this is true, this represents a huge departure from Microsoft's previous M.O.

    Prior to this, they used to leverage their OS monopoly, and bundle "free" tools that would enbrace and extend standards in order to capture marketshare in new markets.

    Since they're not going to be able to do that any time in the near future (ie. Vista is delayed, and even when it does ship, it's not going to be widely adopted with any speed, due to hardware requirements, different operating paradigm, and evil DRM), they have to take a different approach.

    I find that very interesting. I wonder if it's true - and is this a voluntary change in tactics, or a necessary change due to reduced monopoly power?

    --

    These are my friends, See how they glisten. See this one shine, how he smiles in the light.
  21. Why it pays to make wild guesses by Beryllium+Sphere(tm) · · Score: 2, Interesting

    Heard a story about a stockbroker's meeting where they all made forecasts about where the market would be in a year.

    The clever veteran always took an extreme position, either that there would be a crash or that there would be a spectacular runup.

    He figured that nobody would remember a middle-of-the-road forecast but that if the market did crash (or zoom up) he'd get credit for being brilliant.

  22. Re:ADD by Anonymous+Freak · · Score: 2, Funny
    I bet you could drive the price of shit through the roof by putting a Wired magazine in front of Bill Gates with a nice 4 page article on organic fertilizers.


    No, you've got it backwards! Microsoft would start offering shit for free, bundled with every copy of MS Windows!

    Oh, wait.... They already do.

    --
    Another non-functioning site was "uncertainty.microsoft.com."
    The purpose of that site was not known.
  23. Hmmmm by BigLinuxGuy · · Score: 2, Insightful

    I hope that Yahoo remembers how Sybase "profited" by their partnership with Microsoft. Microsoft got an enterprise-class RDBMS and Sybase got, well, ......