Yahoo and Microsoft: If at first you don't succeed...

Yahoo and Microsoft: If at first you don't succeed...

Summary: Reports are flying yet again that Microsoft and Yahoo are close to finalizing a search/advertising partnership. Is a multi-billion-dollar search partnership between the two finally going to happen? If it is, next week would be a great time for Microsoft to announce it.


Reports are flying yet again that Microsoft and Yahoo are close to finalizing a search/advertising partnership.

Yes, this is at least the 50th time we've heard this over the past year. Yes, execs from Microsoft allegedly are jetting to Yahoo headquarters for (non) hush-hush meetings. And yes, both companies are not talking publicly about what might or might not happen.

(Supposedly, Yahoo might outsource its search business to Microsoft and Microsoft might let Yahoo handle part of its advertising. Or something like that....)

The timing couldn't be better for Microsoft if such a deal comes through. On July 23, Microsoft  reports its fiscal 2009 fourth-quarter earnings. With no Windows 7 available yet, Microsoft's Windows client business will  likely be flailing a bit. It's also Microsoft's annual sales conference next week. Can you imagine CEO Steve Ballmer galloping around the stage, with the Microsoft sales and marketing corps cheering his hoarse cries of "Bing! Bing! Bing!"?

By the way, in spite of all the Bing hype and studies claiming exponential growth from week to week, Comscore said that Microsoft's search share actually grew .4 percent in June, the first month Microsoft's revamped search engine was widely available. So now Microsoft's search share is 8.4 percent, Yahoo (which lost share in June) is at 19.6 percent and Google is holding steady with 65 percent of the search market.

At Microsoft's Worldwide Partner Conference this week, neither Ballmer nor Chief Operating Officer Kevin Turner let the word "Yahoo" pass their lips. Ballmer mentioned Bing, but more in the context of proof that Microsoft can take endless abuse but still be tenacious. (And to tell Microsoft partners they should make their search default Bing and not Google.)

Is a multi-billion-dollar Microsoft-Yahoo deal finally going to happen? I have no idea. But if it is, next week would be a great time for Microsoft to announce it.

Topics: Social Enterprise, Banking, Browser, Enterprise Software, Microsoft, Operating Systems, Software, Windows


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • As long as they don't ...

    ... f up yahoo mail. I really don't care what else they do.

  • Maybe somebody can answer this for me

    Why would Microsoft give some of their advertising to Yahoo? I was under the impression that search is worth a billion dollars for each centile because of the ads.

    Sure Microsoft's search share would go up but why would they benefit from it?

    (I ask that in this thread we leave any company bashing out of it for everybody's sake, I would like an answer or a civil discussion because I just don't get it... thanks!)
    • My guess is that Yahoo ...

      ... opened up this round of discussions because they fear and that Microsoft knows it or they wouldn't be at the table.

      Microsoft can afford for to fall flat on it's face but, in partnership with Yahoo, that is less likely to happen. On the other hand, Yahoo cannot afford for to be successful without Yahoo on its coattails because, once Yahoo slips to #3 they have no negotiating power and will ultimately lose out.
      M Wagner
  • No, its called "beating a dead horse"

    Typical political cartoonist now MJ?

    Pogo sez "we have met the enemy, and he is us"
    Ole Man
  • If is successful ...

    ... there is no place for Yahoo to go but down so it is not all that surprising that Yahoo is back at the table with Microsoft (while they stil have value to Microsoft.

    It's been Google first, Yahoo second for a long time now with MS in third and going nowhere. If Bing becomes really popular, Yahoo could lose everything and end up an "also ran" in the race for "search dollars".

    It is better for Yahoo to be #2 and in partnership with #3 NOW than it is for them to wait until they are #3 and try to negotiate with #2 from a weakened position.
    M Wagner
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