Microsoft and Yahoo talk merger
“The talks are real,” said Greg Sterling, founding principal of Sterling Market Intelligence. In the wake of the Google-DoubleClick deal, both Microsoft and Yahoo need to do something “radical” he said. “Both companies are struggling to compete with Google, which has become incredibly powerful in the Internet advertising space”. “This is a competitive response to the amount of power that Google is collecting.”
Google and Yahoo are ahead of Microsoft when it comes to search. Microsoft has been playing catch up to Google and Yahoo with MSN Search, but with Yahoo under its belt, Microsoft would be on a whole new playing field and maybe one day, be able to take on Google search.
Microsoft also wants to benefit from Yahoo’s online expertise. “Microsoft is essentially a technology company that has been focused on its Windows and Office software products,” said Emily Riley, an analyst at JupiterResearch LLC. “Yahoo is very different; it’s an Internet company through and through.”
Reports show that the deal could cost Microsoft as little as 50 billion USD.