Microsoft and Yahoo talks about Partnership

Yahoo and Microsoft are in talks again, but this time it’s a partnership deal that is on the table rather than a proposed acquisition, according to reports.

Yahoo’s new chief executive Carol Bartz and Microsoft boss Steve Ballmer had a face-to-face meeting last week, as part of negotiations which were begun in the last several weeks, said a report in All Things Digital.

According to unnamed sources in both the New York Times and Wall Street Journal, Microsoft and Yahoo are once again in talks. The talks may not be for a full buyout as the earlier ones were, but for a potential partial buyout. Microsoft could potentially just end up turning over its Internet display functions to Yahoo, and let Yahoo take control of both its and Microsoft’s online ad display. It could potentially make Microsoft and Yahoo a stronger opponent to Google in the Internet search advertising market, which is owned and dominated by Google.

Google has such a commanding lead in Internet search and advertising, that just trying to improve on what Google does isn’t working out too well for Microsoft and Yahoo. The two might need these possible ideas to work out if they want to really compete. Even if the two do combine their efforts, it remains to be seen if they could still compete with Google.

Google currently has around 60 per cent of the market, with Yahoo some way off in second place with 20 per cent and Microsoft even further behind that in third. Commentators have generally agreed that the firm shows more direction and purpose with her in charge, although it is still with its problems, and could be amenable to a deal, given the ground it still has to make up to effectively challenge Google.

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