updated 08:20 am EDT, Mon May 19, 2008
MS Yahoo Search Buy Leak
Microsoft's proposed partial deal with Yahoo may see a buyout of the company's search platform in a bid to create a new, alternative challenge to Google, according to tips from those purportedly aware of the negotiations. Rather than buy out all of Yahoo or else strike a license deal, Microsoft will buy Yahoo's core search business and may complete a transaction as early as this week.
What Microsoft will do with the property isn't clear, though speculation would have Microsoft acquire Facebook and merge Yahoo's search staff into the social networking site, creating a much stronger platform for Microsoft's ads than the company has had in the past. The effort would help appease investors and would defuse a hostile attempt by Carl Icahn to replace the Yahoo board with new directors pushing for a full takeover by Microsoft.
The copmany already owns a minority stake in Facebook and so could more easily extend its influence there in place of completely taking over a larger firm.
Microsoft's own Windows Live Search is also often considered a distant third place in the search market and could potentially be replaced by the second-place Yahoo engine, though none of the sources have indicated any immediate plans for such a move.