Microsoft searching for answers

May 20, 2008

microsoft.jpgThe secret is out: What Microsoft wants is Yahoo’s search business. Reuters has reported that the deal now under discussion would have…

1). Microsoft buy the search operation.

2). Yahoo sell off its Asian assets.

3). Microsoft buy a chunk of what remains of Yahoo.

Microsoft and Yahoo representatives declined to comment on the Reuters report. But clearly these talks are all about search.

And that really shouldn’t come as a surprise. After all, search is crushing all other types of advertising in terms of growth and Google is threatening to run away with market share, leaving Microsoft and all others in the dust.

At the moment, Yahoo is a distant second to Google in search in the United States, and Microsoft is third. Together they would have around 30 percent U.S. share, which still leaves them behind Google, but at least keeps them somewhat in the game.

However, to keep things sufficiently complicated, Yahoo and Google are still talking about a possible search advertising deal, creating what columnist Therese Poletti calls a “bizarre triangle.”

“The Mountain View, Calif.-based Internet search giant is Microsoft’s real target in this battle, as Microsoft enviously eyes the piles of money Google is making as the dominant player in Internet search-based advertising. Perhaps Microsoft should think twice before buying Yahoo’s search business, in light of the fact that Yahoo has been talking to Google about outsourcing search,” Poletti writes.

She later adds, “Microsoft chief executive Steve Ballmer was quoted a few weeks ago as saying the company would be fine without Yahoo. But that old adage, ‘actions speak louder than words,’ comes to mind. If Microsoft really does not need Yahoo, then why this incessant dance?”

(Photo: Reuters) 

Keep an eye on:

  • The SEC charged eight former executives of AOL Time Warner, now known as Time Warner Inc, in a fraudulent scheme that overstated company advertising revenue by more than $1 billion (Reuters) 
  • Jean-Francois Decaux, chief executive of JCDecaux, said guidance for underlying sales growth of 6-7 percent for 2008 was “realistic”. Decaux also told the Reuters Technology, Media and Telecoms Summit that Europe’s biggest outdoor advertising group could raise roughly $1.56 billion for a big acquisition without diluting the shares (Reuters)
  • Bertelsmann AG has given the nod to Markus Dohle, the head of its printing unit, Markus Dohle, to take charge at book publishing unit Random House (WSJ.com)
  • Netflix is offering its 8.2 million subscribers an option to watch movies without visiting the post office (NY Times
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[...] offenbar eine Zerschlagung des Unternehmens. Nach einem Bericht des Wall Street Journal, der von Reuters bestätigt wurde, möchte Microsoft nur noch das Suchmaschinengeschäft von Yahoo komplett [...]