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."

Comments

Well...

[metamatic]

I guess it would focus the evil in one place.

No mention of a merger in the article text.

[Whiney Mac Fanboy]

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

Isn't Yahoo! associated with Google ?

[lord_rob the only on]

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

Re:Isn't Yahoo! associated with Google ?

[Whiney Mac Fanboy]

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)

Re:Isn't Yahoo! associated with Google ?

[sbrown123]

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.

It's a Trick!!!

[sesshomaru]

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!

not to be a prick, but...

[cultrhetor]

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...

New Name

[MikeMacK]

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

Re:New Name

[KingJoshi]

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

One of my favorite qoutes

[plopez]

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.

Ballmer hears a Yahoo

[Billosaur]

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.

What planet is the summary from?

[MarkusQ]

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

Microsoft always goes it alone?

[xxxJonBoyxxx]

"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

Re:Microsoft always goes it alone?

[Otter]

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.

Re:Google = Dead Engine Walking

[strider44]

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.

Re:developers!

[PinkyDead]

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.

Re:Google = Dead Engine Walking

[Whiney Mac Fanboy]

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.

Re:Google = Dead Engine Walking

[drinkypoo]

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