Reports: Microsoft and Yahoo close to search ad deal

Microsoft could buy Yahoo's search advertising business, although discussions have broken down before

In less than a week, Microsoft could reach an alliance with Yahoo that could compete better with Google in online search advertising, according to media reports.

Microsoft has been courting Yahoo on and off since February 2008, when it offered to buy the company for $US44.6 billion in cash and shares. The offer was rejected and consequent discussions focused on Microsoft taking over Yahoo's search and advertising businesses.

The latest deal would call for Microsoft paying Yahoo several billion dollars for its search advertising business, with Yahoo also receiving ongoing payments, according to All Things Digital, a blog owned by the Wall Street Journal.

Microsoft and Yahoo could announce a deal as early as next week, according to media reports. Both companies are due to announce quarterly financial results next week.

Microsoft and Yahoo representatives contacted in London on Friday had no comment on the reports.

Yahoo has played a coy game with Microsoft, at times saying it was open to a deal only to later push Microsoft away. In the meantime, Yahoo has undertaken a massive corporate restructuring while trying to revive its brand and gain a larger share of the online advertising market, the source of Google's fortunes.

Last month, Yahoo's outspoken new CEO Carol Bartz asserted that the company would "be better off if we had never heard the word Microsoft." Bartz replaced company co-founder Jerry Yang as CEO in January.

If Microsoft took over Yahoo's online advertising business, the companies could collectively save money while aggregating their market shares. Yahoo has particular expertise in mobile and display advertising.

However, many analysts questioned how quickly Microsoft would be able to integrate Yahoo into its operations and if the resulting entity would be a nimble competitor against Google.

Yahoo's most valuable asset is likely its search advertising business, said Shar VanBoskirk, an analyst who covers online advertising for Forrester Research. If Yahoo sells that, "what is Yahoo left with?" she asked.

Yahoo would have been wise to accept Microsoft's previous offers for the entire company rather than trying to sell off a piece of it. "I think that's a less good move than selling the whole business," VanBoskirk said.

A combined Microsoft and Yahoo would be a highly competitive entity, VanBoskirk said, but added that it's difficult to say whether a deal will come to fruition this time.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags MicrosoftYahooyahoo ms deal

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jeremy Kirk

IDG News Service
Show Comments



Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?