Rumour, rumour, read all about it!
Word is hitting the streets in business sections everywhere that Microsoft is going to buy out Yahoo. Oh, you heard that one? A long time ago, you say? Well, maybe so... but it seems this time Redmond is going a lot farther than just poking around.
According to "sources close to the matter," Microsoft and Yahoo are in the early stages of talks about MS buying the lagging search star
. Talks occurred last year around the same time for MS to solely buy out the search portions of Yahoo, but Yahoo declined. This time, it seems that Microsoft isn't just talking about the search engine, but instead about the entire company.
Yahoo has not fared so well since last year, having yet another losing year in the bottom line and continuing to be greatly outstripped for ad revenue by rival Google. Out of the big three engines, however, Yahoo actually has the most frequent and loyal "groups" due to its diverse social networking services. Unfortunately, the company has not been able to make use of that large user base, failing year after year to turn those page views into any form of profit.
With Google so far ahead of both companies in the money-per-click race (at least as far as search engines are concerned), it might well be time for the two smaller engines to look at consolidating in a hope to catch up. To that effect, it seems like MS might be putting its money where its mouth is -- the company has purportedly already worked out financing through investment bank Goldman Sachs to handle the up to $50 billion transaction.
Were Microsoft to make the buy, it would nearly triple its share of search engine business (in the US, at least) to over 38%. This would put the merged companies a lot closer to Google's 48% of US searches. Of course, this would all be pending regulation... though the two search engines combined would still be a whopping 10% behind Google (and therefore hardly a monopoly), there are other areas in danger. By the time you knitted together Yahoo and MSN social networking, you'd also have a company that could rival sites like MySpace practically overnight.
So, what do you think? Is it fact this time, or are we looking at another great yarn? And if it is
true, is it going to help the search business? Tell us your thoughts in our forums