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...

[metamatic]

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

Microsoft/Yahoo Merger

[Anonymous Coward]

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..

[Virtual Karma]

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

One of my favorite qoutes

[plopez]

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.

What planet is the summary from?

[MarkusQ]

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?

[rkhalloran]

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?

Re:Google = Dead Engine Walking

[strider44]

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:It's a Trick!!!

[Anonymous Coward]

Wow. That's a incredibly shallow way to look at it.

Google isn't just a search engine. Ever heard of Google local? Google maps? GMail? Google Desktop Search? Ad$en$e? ... (Can't resist to put the $ ala M$ - after all, we're talking big $$$, no?)

And microsoft also offers most of these things (Google search -> MSN; GMail -> hotmail; GDS -> MSN Desktop Search; Google maps -> Virtual Earth/Terraserver; and Microsoft's working on a advertizing program ala adsense IIRC...

Even if google doesn't make OS'es or office suites, they both compete against each other in a LOT of [overlapping] fields. And google does fund some of Microsoft products' competitors (like Firefox - competiong against IE).

There's FAR more to it than just a "search engine". And as far as search engines go, google may have been king for a while, but I'm thinking this may change soon. Their results have been very much downhill lately (IMHO). Every time I search for something, half of what it finds is links to expired ebay auctions, onlines stores that sells the product (newegg/amazon/bhphoto/...) and often has none of what I'm looking for, tons of pages of linkfarms and other crap (like a bunch of crappy unrelated blogs). Come to think of it, I just may try MSN today... (Not that I like MS, MSN, passport or all that crap, but I want good search results, and google is starting to deceive and seemingly isn't doing anything about it - other than perhaps cry "but MS will use their own search engine by default for their own software!" - oh wait. That isn't helping their results... If their results are good, people will come - no need to resort to crying like that. Google, get working on fixing your results already.

Re:Isn't Yahoo! associated with Google ?

[sbrown123]

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.

Google has become arrogant

[suv4x4]

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).

wall street reply

[mapkinase]

YHOO +10%
GOOG - no change

Toiling on it's own!?

[psbrogna]

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.

Re:What planet is the summary from?

[zataang]

> What new markets captured? XBoX? Palm? MSN? Haven't all these been late starts? And despite being mostly a MS basher, I think MS has captured significant market share in these domains.

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

[TheLoneGundam]

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.

Re:Huh?

[mosburger]

Pssst... SQL Server was purchased from Sybase. http://en.wikipedia.org/wiki/Sybase [wikipedia.org]

If this is true. . .

[jafac]

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?

Re:It's a Trick!!!

[killjoe]

What's amazing to me is that people still actually cosider partnering up with MS. After all the partners they stabbed in the back you'd think people would wise up.

Hmmmm

[BigLinuxGuy]

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