December 3, 2008 by Jack Fox
This old chestnut again I’m afraid. According to a report in the Times, Microsoft and troubled search engine, Yahoo are attempting to hammer out a search deal and are thought to be close to agreement. The deal is reported to involve Microsoft buying the company’s search business – the Times has the figure being paid at about $20 million. If that’s accurate it would be a very good deal for Yahoo, especially considering that the market capitalization of the whole company is less than $16 billion.
As regular readers of this blog will know, this has been a real ‘will they won’t they’ situation for months now. One week Yahoo will turn down an offer, the next they’ll all but ask for a buyout, whilst Microsoft denies any interest in Yahoo then changers its mind and hints at a possible deal in the space of a few days. It’s the corporate equivalent of that Nescafe advert. Now however, finally, it looks like it might happen. The terms of the deal are said to have been broadly agreed, though it could all still collapse – I wouldn’t put it past them.
In terms of competition, the deal would be a very good thing. We really need a viable alternative to Google in the search market and, though they probably wouldn’t see it this way, Google needs the competition to keep it sharp. It’s had everything its own way for too long.
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