Microsoft & Yahoo Talk Partnering to Challenge Google?
Numerous sites are covering the Wall Street Journal story A Microsoft, Yahoo Tie-Up? by Robert A. Guth and Kevin J. Delaney in WSJ’s Heard On The Street column. The column states that whispers have been heard that some factions within Microsoft are pushing an anti-Google strategy which includes, gasp – teaming up with Yahoo.
That would be a major departure for Microsoft, the software maker that is legendary for toiling on its own until it captures a new market. However, people familiar with the situation say that Microsoft has considered the idea of acquiring a stake in Yahoo, and that the two companies have discussed possible options over the course of the past year.
Currently, talks of an equity stake in Yahoo don’t appear to be active, given that Microsoft is focusing on a reorganization that it hopes will re-energize its effort to compete with Google, the fast-growing provider of search services and advertising….However, people familiar with Microsoft say its top management remains open to a deal with Yahoo as pressure grows to perform better against Google.
Garrett French has a rather fast read of a wrap-up on the WSJ article at Search Engine Lowdown and Danny Sullivan thinks that Microsoft-Yahoo would make a bit of sense, at least more than Microsoft-AOL.
A nice quote from Mr. Sullivan:
“…to compete against Google, you don’t need an advertising network. You first need a quality core web search engine, which your heavy investment to date has failed to create. And so back to Yahoo, which has exactly what Microsoft needs, that core technology.”
My view on the rumor? I’ll believe it when I see it.
Until then, smells like a bunch of anti-Google speculation and fear to me. MSN is to Yahoo as Live Windows is to Google, both companies feel the heat coming on from Redmond and are both taking actions to fortify their strongholds on the search, social and web content industry.
With Steve Berkowitz now leading MSN Search and Ballmer putting massive funds to build the next Google, Microsoft will become a force to reckon with, and the days of MSN playing copycat are over. But still, there is a reason why Yahoo has been acquiring so many tech companies and expanding their search powered network – and I doubt becoming a Microsoft acquisition target is a major one of those reasons.