All Things Digital yesterday brought out an exclusive piece of news about the CEOs of Yahoo and Microsoft having several talks on a likely partnership for their online business, especially search. According to allthingsd.com, the talksbegan in the last several weeks that apparently included a face-to-face meeting last week, Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer are finally talking about search and also advertising partnerships the companies could possibly strike. The report also suggested that another takeover bid by Microsoft is not part of the talks this time around.
The key points of a plan together might include the biggies swapping assets or have trade off of services. In such a plan, Yahoo might take over all of Microsoft’s display and premium advertising business to sell along with its own, while Microsoft would run the search advertising business for the pair.
The idea is simple of course, and in fact nothing new – join hands and take on Google. Google enjoys nearly 60% of the search market share, while Yahoo has 20% while Microsoft joins in at 8%. The fact that Yahoo has much higher share compared to MS was one of the reasons it was never keen to sell its search side of business to Microsoft, in this case it had the bigger hand of the two.
I guess a tie up of some sorts makes sense as that can help Microsoft and Yahoo approach advertisers as one publisher with a higher stake together rather than undercutting each other both in terms of users as well as potential revenue. Acting solely to take on Google would mean you are drawing swords at every corner, which would mean even while hurting Google you are more likely to hurt smaller players and even yourself more. Say for instance Microsoft is able to dent 2% each of Yahoo and Google, it still has only 12% of the share while Google still stands mighty with 58%, the scenario in front of the advertiser doesn’t change much even though MS has gained 4%.
For Yahoo, being number two means one one hand it has to compete with Google and on the other keep those below off limits. Tying up would mean it can safely focus its guns on Google to capture its share, Microsoft of course wouldn’t mind that because they have a commercial tie up. The important point however is that neither Yahoo nor Microsoft have officially commented on this update.
well all i can say is they need to think out of the box….such alliances wont make any dent in google’s armour….most microsoft and yahoo are failed companies in the rapid changing UGC internet play….
i doubt if this news is just a rumour, dont think there is much scope for them to come together.
rather than worrying abt google thy should focuss on comingup with new products which consumer may want !