A Microsoft, Yahoo Tie-Up?

Contributed by mm | May 3, 2006 1:21 AM PST

Google is now public enemy No. 1, and a merge between Microsoft and Yahoo will be a good answer to that.

One faction within Microsoft Corp. is promoting a bold strategy in the company's battle with Google Inc: Join forces with Yahoo Inc.

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.

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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.

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Comments

>>> Apex Commented on May 3, 2006

"Google is now public enemy No. 1"

Not according to Bill. He continually states that Google is not Microsoft's main competitor, that they are still focusing on their real competitors like IBM, etc. Does IBM even have a product that competes with Microsoft in any meaningful way? Its a pretty funny statement that he keeps making.

I guess thats the easy way to divert the questions of how to compete with Google. Just deny they are a competitor that matters.

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