Yahoo!, Microsoft near search deal: WSJ

Thursday, July 30, 2009

Yahoo! and Microsoft are close to forging a partnership on Internet search, and an agreement could be reached as early as Wednesday, The Wall Street Journal reported.
The deal, which would unite the companies against Web search market leader Google, involves Yahoo! agreeing to use Microsoft's new Bing search engine on its own sites, the newspaper said.
The Journal, citing "people familiar with the matter," said the deal between the Internet portal and software giant, which has been under discussion for months, could be reached as soon as Wednesday "but could be delayed."
Under the agreement, Microsoft, which made a failed 47.5-billion-dollar takeover bid for Yahoo! last year, would have access to the volume of search queries that run through Yahoo!'s search engine, the newspaper said.
In exchange, Yahoo! would remain a force in search-advertising sales and would handle selling text ads that appear next to the search results for its sites and some Microsoft sites, it said.
The Journal said financial arrangements and other terms were not immediately available.
All Things Digital, a technology blog owned by the Journal, said the deal is "less sweeping than originally conceived" and does not involve upfront payments by Microsoft to Yahoo!
"This makes the deal much smaller than ones previously envisioned, which included Microsoft taking over both Yahoo!'s search and its text-based search advertising businesses, in exchange for large payments and guaranteed revenue," it said.
The limited scope of the partnership may have contributed to the tepid market response to the report. Yahoo!'s share price gained 1.51 percent to 17.48 dollars in after-hours electronic trading.
Yahoo! chief executive Carol Bartz refused a week ago in releasing the company's quarterly results to comment on talks with Microsoft but gave her stamp of approval to Bing, which has been generally well-received.
"I think Bing is actually a good product," Bartz said. "Microsoft deserves kudos for Bing."
Bartz replaced Yahoo! co-founder Jerry Yang as chief executive six months ago amid stockholder fury regarding the failed talks with Microsoft, which wanted to merge the companies' online search resources to better battle Google.
According to Comscore, Google has a 65 percent share of the lucrative search market, followed by Yahoo! with 19.6 percent and Microsoft with 8.4 percent.


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