Microsoft/Yahoo Merger to Take on Google?

Mz6 writes "One faction within Microsoft is promoting a bold strategy in the company's battle with Google: Join forces 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. Two wild cards remain: Steve Ballmer, who has historically shunned large acquisitions, and Yahoo co-founder Jerry Yang, whose support would be key to bringing the necessary Yahoo shareholders on board for a deal. Mr. Yang and others in Yahoo would be hard-pressed to sell to Microsoft, people close to the company say. However, people familiar with Microsoft say its top management remains open to a deal with Yahoo as pressure grows to perform better against Google. The increasing pressure on Microsoft -- not just from Google, but also from its own shareholders, as well as from advertisers that want an alternative to Google -- could help to justify the acquisition or some kind of business collaboration, these people say."

Well...

I guess it would focus the evil [boingboing.net] in one place.

No mention of a merger in the article text.

Summary is a troll - there is no mention of a 'merger' in the article text, just cooporation

Here is the article, so you don't have to sit through the silly flash into:

A Microsoft, Yahoo Tie-Up?
MSN Veterans Want a Pact
To Bolster Web-Search Ads
And Better Challenge Google
By ROBERT A. GUTH and KEVIN J. DELANEY
May 3, 2006; Page C1

One faction within Microsoft Corp. is promoting a bold strategy in the company's battle with Google Inc: Join forces with Yahoo Inc.

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.

Two wild cards remain: Microsoft Chief Executive Steve Ballmer, who has historically shunned large acquisitions, and Yahoo co-founder Jerry Yang, whose support would be key to bringing the necessary Yahoo shareholders on board for a deal. Mr. Yang and others in Yahoo would be hard-pressed to sell to Microsoft, people close to the company say.

However, people familiar with Microsoft say its top management remains open to a deal with Yahoo as pressure grows to perform better against Google.

The increasing pressure on Microsoft -- not just from Google, but also from its own shareholders, as well as from advertisers that want an alternative to Google -- could help to justify the acquisition or some kind of business collaboration, these people say.

Since 2004, Microsoft has invested heavily to better compete with Google but it has yet to boost its share of search or online advertising. At the same time, Google has released products that some industry experts say could over time eat into Microsoft's core software businesses.

Microsoft executives say that they are investing for the long haul, and that the online-search market is still nascent and has much room for growth. A Microsoft spokesman declined to comment. A Yahoo spokeswoman declined to comment, saying the company doesn't discuss "rumors and speculation."

In one sign that Microsoft may be serious about major acquisitions, it has hired search-industry executive Steve Berkowitz to head MSN, the Internet unit that is building the Web-search business and is leading Microsoft's charge against Google, including Web search. Mr. Berkowitz, the former chief executive of search site Ask.com, is viewed as a likely deal maker at MSN, having completed more than 40 acquisitions in his career, according to a person close to the matter. He starts May 8. Mr. Berkowitz couldn't be reached for comment.

Microsoft's recent quarterly results provided a picture of the pressure it faces from Google. On Thursday, Microsoft said the MSN unit fell into the red and its revenue declined. Those numbers show it is failing to capture the same online-advertising tail wind that is helping Google. By contrast, Google's first-quarter net income rose 60% from a year earlier to $592 million. U.S. online advertising generally rose 30% to $12.5 billion last year, according to the Interactive Advertising Bureau trade group and consulting firm PricewaterhouseCoopers.

Microsoft executives also said they will need to boost investments in online businesses in the next fiscal year to levels far higher than Wall Street had expected. That prompted an 11% selloff of Microsoft shares Friday. The stock has ticked lower this week. In 4 p.m. Nasdaq Stock Market composite trading, shares fell 1.2% to $24.01, after hitting a 52-week low during the day of $23.90.

At its core, the clash between Microsoft and Google centers on Microsoft's attempt to build up its We

Isn't Yahoo! associated with Google ?

If I remember correctly, Yahoo! search engine used Google technology.

Re:Isn't Yahoo! associated with Google ?

If I remember correctly, Yahoo! search engine used Google technology.

Yahoo used Google results for its searches between October 2002 & Feb 2004. They have used their own search engine (acquired with their purchase of Inktomi in 2003) ever since.

Read all about it at Search Engine Watch [searchenginewatch.com]

There's definitely a difference for some searches (and both are superior in my experience to MS's offering)

Re:Isn't Yahoo! associated with Google ?

Ignore the bullcrap you are hearing. Apparently there are a bunch of analysts out there who are pissed off that Google didn't acquire company X when they said they would. So, to keep their "insider" title they are releasing more steaming piles of wild guesses such as "eBay will join Microsoft" or "Amazon set to deal with Microsoft". One common line I am seeing is that they keep pointing to Microsoft to merge with someone else to do something about Google. The only thing I can guess is that these "insiders" probably have some Microsoft stock and are hating the recent decline due to Vista delays and advertisers flocking to Google. Screw em and don't pay these people mind.

It's a Trick!!!

As Ash would say, "It's a Trick!!!" When Microsoft goes to companies and says, "Hey, why don't we make a strategic partnership against our common enemies?" they actually mean, "Hey, we'd like to steal your technology and run you out of business."

Farewell, Yahoo! a flight of angels sing thee to thy rest!

GINYF

A Yahoo/Microsoft Takeover of google...If this happens, then hopefully we won't have to deal with an even more annoying Google Toolbar. And not to mention the changes Google would go through, to even get to results we'll have to trudge through 3 pages of ads, and Microsoft news releases.

Google = Dead Engine Walking

With apologies to all the Google fans out there, the Internet has changed the top search engine several times in the past and it will change it again.

Just about every Internet veteran company has now recognized Google for the threat it is and has declared an all out war against them. Basically, it's Google against everyone. In such cases, everyone usually wins. Unfortunately for Google, they should expect many more actions like IE7 having a default search bar just like FireFox, only defaulting to pointing to MSN Search.

Sorry, Google - it was fun while it lasted.

Re:Google = Dead Engine Walking

So what? Google's more than just a search engine - it's a huge advertising firm that just happens to create some neat software. A company as big as Google doesn't just die. Besides, I think that you're full of crap, not just because there'd be a huge antitrust spat if IE had a non-changable lock to msn search, but also because you don't MSN Search something, you Google it. That's not going to change anytime soon.

Re:Google = Dead Engine Walking

Which is exactly how it is in IE6, so how is that any different from right now? Answer: It isn't.

Re:Google = Dead Engine Walking

hahahahaha - this is bigtallmofo's comment in 1986:

With apologies to all the microsoft fans out there, the software industry has changed the preferred O/S vendor several times in the past and it will change it again.

Just about every O/S company has now recognized microsoft for the threat it is and has declared an all out war against them. Basically, it's microsoft against everyone. In such cases, everyone usually wins. Unfortunately for microsoft, they should expect many more actions like IBM PC's being distributed with PC-DOS by default.

Sorry, microsoft - it was fun while it lasted.

not to be a prick, but...

Does anyone else find it ironic that M$ is partnering with Yahoo! given the recent post concerning Yahoo's shady partnership with spyware companies, especially considering that IE's security holes are one of the reasons that spyware got so bad, so fast? A match made in heaven...

New Name

Yeah, they could call themselves Ya'soft - they could sell Viagra too.

Re:New Name

I guess we should be thankful Microsoft didn't join forces with Nintendo in the console business. They would've released Micro Wii.

Bye bye

RIP Yahoo.

yuck!

i abandoned msn back in 1999 and started using yahoo for email & news, now it is time to dump yahoo too, hello google my new friend.

Microsoft/Yahoo Merger

Why does Yahoo! need Microsoft? Microsoft has largely stumbled in its internet ventures, while Yahoo! has been fairly successful. I don't see what Microsoft brings to the table in this.

Yahoo will loose..

In this deal Yahoo will probably loose more than Microsoft will gain.

Huh?

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.

I would have said that Microsoft is legendary for letting the market become somewhat stable, and then buying the best product therein. Visio, Groove, (OK, maybe not SQL Server). Did MS actually make PowerPoint from scratch?

One of my favorite qoutes

I think from Woody Allen (cue lame off topic Woody Allen jokes):
"The lamb may lay down with the lion, but the lamb won't get much sleep at nights".

Considering MSs history of screwing its partners, Yahoo would be insane to 'partner' with MS.

Ballmer hears a Yahoo

Two wild cards remain: Microsoft Chief Executive Steve Ballmer, who has historically shunned large acquisitions, and Yahoo co-founder Jerry Yang, whose support would be key to bringing the necessary Yahoo shareholders on board for a deal. Mr. Yang and others in Yahoo would be hard-pressed to sell to Microsoft, people close to the company say.

I can't see this happening, precisely for this reason. Ballmer's ego wouldn't let him co-exist with Yahoo and Yang wouldn't be caught dead letting Ballmer in the building. Eventually it comes down to which one would flinch in a staring contest, but I suspect they'd both go blind before agreeing to work with the other.

What planet is the summary from?

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.

Huh? This is just plain not true.

1. Microsoft frequently "partners" with others (e.g. MSNBC). What they are famous for isn't refusing to partner, but rather turning on their partners and destroying them the moment it becomes to their advantage to do so.
2. What new Markets has Microsoft captured exactly? IIRC, most of their attempts to go beyond their core competence have been costly failures.

--MarkusQ

Antitrust concerns?

Even given this administration's please-bend-me-over attitude towards business, I can't imagine a deal of this sort wouldn't draw some attention from the DOJ. And with their EU counterparts already looking to drop a half-billion-Euro fine on MSFT, something like this would only encourage them to take a hard line.

Then there's the problem that MS has traditionally managed to fsck up most companies they've partnered with, so why would Yahoo willingly get themselves into that situation?

Microsoft always goes it alone?

"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. "

Dunno if I buy that. See:

http://dondodge.typepad.com/the_next_big_thing/200 5/10/microsoft_will_.html [typepad.com]
"QDOS became MS-DOS, ForeThought became Powerpoint, SoftDesign became Microsoft Project, Vermeer became FrontPage, PlaceWare became Live Meeting, Vicinity became a key part of MapPoint, nCompass Labs became Content Management Server, Bungie Studios became Halo, HotMail, Visio, Great Plains, Groove Networks"

Or...
http://www.computerworld.com/softwaretopics/os/win dows/story/0,10801,78739,00.html [computerworld.com]
http://www.microsoft.com/presspass/features/2005/m ar05/03-10GrooveQA.mspx [microsoft.com]
http://www.networkworld.com/news/2005/021405-micro soft-sybari.html [networkworld.com]

Re:Microsoft always goes it alone?

They buy, develop and market technologies; they don't typically buy established players for their market share. Hotmail and WebTV are the only two cases I can think of where Microsoft did that.

I can't believe it!

It's not Dvorak...

It's not Cringley...

BEHOLD! There is a NEW troll of the internet, posting wild speculations and creating rumours! 'Ware, /.ers! He is on the loose, armed, and unknown!

Sounds like a bad strategy

I'm not sure how becoming bigger and adding inter-company politics to the already debilitating (for MSFT) itra-office politics will help them build search and advertising products that are better than Google's. In my completely naive opinion, I think each company would be better off throwing a handfull of their best people in a room and seeing what they can come up with when they can focus on technology.

Hotmail all over again?

Yikes ... most of Yahoo! runs on unix based servers. Many thousands of them, in fact. Imagine the chaos and ugliness that would ensue over there if Microsoft were to acquire them. They'd have to cut everything over to Windows, and it wouldn't be pretty. In fact, it would give Google an operational advantage over MicroHoo.

It seems normal to me

Microsoft joins forces with one company to screw everyone else, and after that occurs, Microsoft procedes to screw that company.

Result: lots of debree, many unhappy customers, Microsoft's version is a stagnating pool of buggy crap; but with nobody else in the game, Microsoft wins!

Google has become arrogant

The Google fanboys will definitely disagree, but the monopoly over the search engine market is having a bad effect on Google lately.

They have become more arrogant, bought their own lobbyists and, started growing by just buying a lot of smaller companies.

I think a little healthy competition will do good to Google, just like it will do good to Microsoft (remember: IE7 exist largely because of Firefox).

Everyone vs. Google?

Perhaps the googleplex mindshare is cognizant of
that growing dichotomy (gotta use them beeg words)

When will pure search be 10% of googles business?

Is 'Everyone' nimble enough to catch all
of the cool stuff sneaking out of googlelabs?

Is google like the internet and will route around
any blockages like Microsoft or Yahoo?

We shall see...

wall street reply

YHOO +10%
GOOG - no change

No Please No!

Yahoo is still the best directory listing (dmoz.org is close to it). Yahoo's search has started to improve again. It has a chance to get back on top now that Google is starting to do evil. Plus Yahoo Games is the largest collection of free Internet games out there. MS will kill all of this by infusing them with some awful corporate culture and force them to use MS products. Oh Yahoo please say no to MS!

microhoo

atlast, a company with a funnier name than google.

I'm confused

Since when does Google design operating systems? Since when does MSN operate a dominant search portal? I think it's a while before we arrive at "the crunch", so to speak.

Microsoft should buy them out

And then make MSN a part of Yahoo, not the other way around. With Microsoft's power, Yahoo could pose a more credible threat to Google, but Microsoft would have to mostly leave them alone and push them through its other products. Who knows, Microsoft might be in a good position to actually force Yahoo to clean up some of their advertising and things like that.

There goes Flickr!

Need to find an alternative for my photos.

Why not

Why doesn't Microsoft focus on creating a better product and fight it out in the market place? They seem to be afraid to compete; they have to have full certainty of winning, no matter how they achieve it.

I'd like them to compete instead, so all the companies have to keep trying to improve their products and people get to choose.

Toiling on it's own!?

It was always my understanding that many of their pieces/parts have a non-MS lineage. For example: CPM begat MS-DOS, Mosaic begat IE, Sybase begat MS SQL, Hotmail begat... well, MS Hotmail. I've heard (unconfirmed) that their TCP/IP stack wasn't exactly home grown either.

How to build a better search engine

%SUBJECT% is the real problem. Yahoo + MSN search isn't twice as good as each of those two alone. What makes Google a better search engine? That's what they have to find out--together, or each on their own. I'm constantly running queries against the Google competitors only to come back to Google to get the real answer. Not for trivial queries, but the interesting ones. I'd like to see better competitors because Google knows too much about everyone already.

odd visual

Is it just me or others having ludicrous visuals of a these IT titans embroiled in a celebrity boxing match? Perhaps it's just the Chicken Littles that are embroiled.

Slightly Offtopic -- How desparate is yahoo.

A few days ago I installed Adobe Acrobat on a windows PC so I could RTFM.

I was rather surpised to see the "Yahoo" toolbar appear on the IE browser
next time I fired it up.

I didnt ask for it, there were no "do you to install?" questions it just appeared. And it was a pig to get rid of.

It wasn't my PC and I felt guilty about leaving it in a polluted state,
and I have come to regard anything Yahoo as pollution.

Isnt there some sort of law against this kind of stuff?

Why is it always "Big Company vs. Big Company"?

Why do people seem intent on pitching these companies against each other? Aren't they ALL making money? What's the matter - dividends are too small? Stock didn't ramp up 100% in 7 days? Didn't make a billion dollars overnight? These days, when people talk about a company "not growing" what they really mean is "I invested to ride the stock price rocket, damnit, not to wait and collect my share of the profits" - and I think this constant Micrsoft-killer, Google-killer kind of crap is related to that.

Rules of Acquisition

It seems that Steve and Bill have forgotten rules of acquisition. http://www.sjtrek.com/trek/rules/ [sjtrek.com]

#52: Never ask when you can take.

and

#218: Always know what you're buying.

Enjoy,

I use yahoo because its not M$

I could just as easily use M$ homepage as Yahoo's, but I don't as a matter of choice. And M$ has passport, what would that do to Yahoo?

If this is true. . .

If this is true, this represents a huge departure from Microsoft's previous M.O.

Prior to this, they used to leverage their OS monopoly, and bundle "free" tools that would enbrace and extend standards in order to capture marketshare in new markets.

Since they're not going to be able to do that any time in the near future (ie. Vista is delayed, and even when it does ship, it's not going to be widely adopted with any speed, due to hardware requirements, different operating paradigm, and evil DRM), they have to take a different approach.

I find that very interesting. I wonder if it's true - and is this a voluntary change in tactics, or a necessary change due to reduced monopoly power?

I can't wait....

... for the blue web page of death

Something is missing

I can't help but notic that the one thing not talked about in the article is technology.
Batman and the Underpants Gnomes could join with Yahoo and MSN but if the technology doesn't offer an advantage over Google then they are all wasting their time.

Poor Yahoo

Right when you thought the Big Y couldn't be more obnoxious.

Given MSN, MSNBC, and various other media portal experiences from MS, MSYahoo ought to be stillborn.

I don't think MS knows how to package search.

ADD

Microsoft is very easily distracted, aren't they? A few years ago the big enemy was Linux. Now it's Google. I bet you could drive the price of shit through the roof by putting a Wired magazine in front of Bill Gates with a nice 4 page article on organic fertilizers.

Not to beat a dead horse, but...

...am I the only one that read "Steve Balmer hysterically shunned big takeovers" in the summary?

Hmmmm

I hope that Yahoo remembers how Sybase "profited" by their partnership with Microsoft. Microsoft got an enterprise-class RDBMS and Sybase got, well, ......

Here's my question

Does microsoft really have any chance to overtake google? Their shareholders sure don't seem to think so, or so the share drop indicates...

A cursory glance at msn shows me a portal, the likes of which I might have seen in the late 90s. A million different sites compacted into one, totally unintelligable.

What's sad is you can go here http://search.msn.com/ [msn.com] for a major improvement. How does it improvement? It looks exactly like google, that's how.

How exactly do they plan to innovate, aside from copy things that google has already done? Microsoft is dumping all this money into a "fight" with google, but do they actually have a business plan? Massive R&D without any overall direction other than "beat google" will do nothing. What are they going to do anyway? Release a version of mail that looks exactly like gmail? Release microsoft earth? Bah. Microsofts main strength when expanding into new markets lies in their ability to integrate with other microsoft products, but with the web, that's not particularly helpful.

As a stockholder, I don't want them to waste any more money that I don't think they can recoup. They are dumping billions into a business (msn) which has maybe 100 million profit a year? And no real guarantee to ever go beyond that? This mindless expansion in every direction is just going to hurt them in the long run, when the profits on windows and office can no longer cover the massive losses on *all* of their other products. I want them to make their business *profitable* and to focus on doing well in their key markets. Microsoft seems to think that they only way to defend windows, is to conquer every other market on the planet as well, which is just stupid. They can't do it, and it they thought about it they'd realize that.

Meanwhile, Apple has carefully manuevered into a position where they can take a chunk out of microsofts ass. I'm not saying they will, but if they don't it's not because the potential isn't there. I'd like to see them spend that research money on getting OS releases out faster and higher quality, so that they can deal with emerging competition. In many ways (aside from marketshare of course) microsoft is playing catch up with apple in the OS game, and that's kind of a dangerous situation now considering that apple could start selectively chewing into their market with mac clones, or an osx server release that supports some third party manufacturer's hardware.

times change

there was time when yahoo founders had an "ms must die" poster in their office

Re:Bender

Whoa! I'm not reading that crap. Summarise it in one word.

Fucked.

Re:Bender

shit

Re:developers!

Ballmer: I'm gonna fucking kill Yahoo!
Shareholders: No, Steve - "Merge With"
Ballmer: (Confused Expression) Er-ugh...
Shareholders: M-er-ge w-i-th
Ballmer: (Picks up chair - smiles)
Shareholders: No, Steve - M-eh-her-ge w-i-i-th-h.

Re:developers!

Learn Objective C and embrace that change that will come.