May 3, 2006 Comments
Unlikely. But according to an article in today's Wall Street Journal, you shouldn't rule it out either. Despite both Microsoft and Yahoo!'s desire to catch up with Google on their own, the reality is that neither one has fared very well at that challenge over the past year. In fact, both Microsoft and Yahoo! have actually lost search market share since last year. Apparently, that has some folks within Microsoft pushing for a pairing.
From the Wall Street Journal:
A Microsoft-Yahoo combination could merge complementary strengths. To succeed in Internet-search advertising -- the business driving Google's growth -- a competitor needs three core elements: strong technology, a mass of consumers and a universe of different advertisers. Microsoft is spending untold hundreds of millions of dollars on the technology piece, but it doesn't yet have enough consumers using its MSN service to entice the needed advertisers. A tie-up with Yahoo could address part of that problem. It has more than 100 million people visiting its site a month, making it the most popular Web site in the U.S. So far it is losing the race to Google when it comes to the technology for matching ads to consumer search queries, though it plans to unveil an upgrade to its system this month.
Combined, MSN and Yahoo would have all three pieces and, at least on paper, could leapfrog Google. Combined, the companies would have the "technology and the scale," to compete, says Ellen Siminoff, a former Yahoo senior vice president and now chief executive of search marketing company Efficient Frontier Inc.
But would Microsoft really give up the chance to be the solo winner of search? Even if they would, what is the chance that Yahoo! would have any interest of pairing up with one of their top two competitors? The addition of Steve Berkowitz (former CEO of Ask.com) to the Microsoft team has sparked some of the speculation. Berkowitz has headed up dozens of partnerships in his career.
Even still, I find the likelihood of a pairing to be little more than Wall Street speculation. Yahoo! has a solid hold on its footing as the number one destination site on the web. Yahoo! is also sitting in a pretty solid number two position in the search wars, with nearly double the market share of Microsoft. It hardly seems in their best interest to pair up.
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