Yahoo Search going to Microsoft?

Per Ad Age Yahoo may be outsourcing their search function to MSFT.

Not so shocking base on the events between Yahoo! and MSFT over the past 1 3/4 years. At first the buyout stalled, seemingly due to Jerry Yang’s ego and lack of ability to “give” in to MSFT. If he did that deal, I think that his legacy would have been much better than it will be now.

Since the new CEO, Carol Bartz showed up on the scene, the conversations have definitely picked up. from my vantage point it looks like she is more focused on shareholders and their value than Yang. Bartz seemingly will do what is best for shareholders as opposed to her ego.

Interestling that the potential deal will be based on rev share instead of a big check at the deal onset.

This quote was of interest to me:

“The latest terms of the deal underscore Microsoft’s devotion to developing and owning technology vs. selling media. The deal won’t make it a bigger seller of online advertising but it would allow it to eliminate a search-technology competitor in Yahoo and consolidate roughly 30% of the search marketplace on its own platform — a large enough share, CEO Steve Ballmer seems to believe, to dent Google’s dominance.”

(Disclosure, I used to work at MSFT, and I still own shares.)

MSFT definitely seems focused on tech, albeit their biggest challenge is stitching all of their ad platforms into a single one. That said they are selling a ton of online media, too. They have yet to turn a profit on the interactive media business, but their historic profit from tech is unmatched. I wonder how media salespeople feel at both of these companies?

Ownership of data is said to be a sticking point in the discussion and seems to make sense. MSFT would love t have that data to help fund its’ display network and their vision of a singular eco system. Yahoo! also has a network and would like to do the same.

This story should be all over the wonderful world of Twitter this week.


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