The 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.”