Microsoft Yahoo Merger Could Be a Reality

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Today the search and stock market news channels are buzzing with talk of a possible merger between Microsoft and Yahoo, which would see the two technology powerhouses teaming to take on Google in the world of search, advertising and beyond. It is also being reported that Microsoft has offered $50 Billion to Yahoo in an effort to acquire the company.

According to Kevin Delaney of the Wall Street Journal, Microsoft and Yahoo executives are weighing the possibility of merging the two companies, a year after Microsoft originally approached Yahoo in takeover talks.

In what appear to be early-stage discussions, executives at Microsoft and Yahoo are taking a fresh look at a merger of the two companies or some kind of match-up that would pair their companies’ respective strengths, say people familiar with the situation.

The renewed talks are a sign of the continued growth in Google’s power and problems over the past year with in-house efforts at Yahoo and Microsoft to ride a boom in Internet advertising. Meanwhile, management changes at both companies could help pave the way for a pairing that a year ago couldn’t happen.

The merger would result in a search technology which would own cose to 39% of the search engine share, trailing Google’s 48% hold (comScore). Additionally, in the world of Search Marketing, Yahoo and Microsoft have a rich past together, as Yahoo! Search Marketing / Overture supplied MSN Search with sponsored listings for years.

Microsoft launced its own sponsored search offering, adCenter, but the long term relationship and the launch of Yahoo’s Panama search marketing interface could lead to the two companies taking the best of each offering, and creating a total web, TV, mobile and search oriented advertising system, especially with Yahoo’s latest acquisition of the Right Media ad exchange network which rivals Google’s DoubleClick acquisition.

The merger talks even have Wall Street jumping as Bloomberg reports that Yahoo shares have increased over 18% in value in pre-market trading.

Loren Baker
Loren Baker is the Founder of SEJ, an Advisor at Alpha Brand Media and runs Foundation Digital, a digital marketing strategy & development agency.
Loren Baker
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  • Pablo Palatnik

    I think financially for Yahoo, this could make sense according to wall street since the dissapointing Q1. Both have launched new interfaces recently and improved thier search, so I dont think one needs the other in that sense.

    Yahoo keeps making moves to keep up with Google and still maintains good market share (not as good as Google obviously) but it is the 2nd most used search engine in the United States. MSN has actually lost market share (never had a good grip on it) so it makese sense on that end, but again, PERSONALLY, i think thier lacking in design and advertising.

    It really all comes down to Yahoo deciding if they can keep competing with Google in the years to come in terms of search (which they can) and aquisitions (financial power). They need MSN only for one of those reasons.

  • Tommy

    I blogged my opinions here, but I’d love to hear others view on the matter.

  • Icyelene Read

    What happens to yahoo accounts if microsof akes over?

  • Ronald Redito

    Google is no doubt the number 1 search engine in the world today. Because of this Yahoo and MSN have tried their best to beat the Big G for several years. And now, their solution is merger. There will be a big impact but I guess they will need more efforts because I think their combined market share is still less than Google’s.