Technics: Internet: MicroSoft, Yahoo to join in online search services, compete with Google

Bloomberg.com published with updates a report by Jonathan Thaw and Jason Kelly that relates to major changes coming to the battle of titans on the Internet, particularly the search services. Yahoo and Google are the major two, with Google far in the lead but not that far. "Microsoft, Yahoo May Partner to Challenge Google in Web Search" (May5,2k7).

MicroSoft has been unable to break effectively into the field, but wants part of the ad revenues that the search services routinely place on their pages. What is being presented to the public at the moment is called a "partnership," but the relation being explored seems to have in its background MS's intent to buy and swallow ("merge") Yahoo in six months time.

May 5 (Bloomberg) -- Microsoft Corp. and Yahoo! Inc. have held talks about a partnership designed to boost their share of the Web search and advertising market and catch up with Google Inc., people briefed on the discussions said.

The discussions are in the early stages and focus on a partnership rather than a merger, said one of the people, who asked to remain anonymous because the negotiations are private. Shares of Yahoo jumped the most in three years yesterday after the New York Post said Microsoft wants to buy the company.

Yahoo and Microsoft, the world's largest software maker, have struggled to dent Google's dominance in searching the Web and in the booming market for advertising spots next to search results. A combination would triple Microsoft's share of the U.S. search market to 38.4 percent, rivaling Google's 48.3 percent, according to ComScore Inc.

``It gets them enough economies of scale to be a viable force in search,'' said Walter Price, who oversees about $2 billion including Microsoft shares at RCM Capital Management in San Francisco. ``You have to ratchet up your capital expenditure to compete with Google.''

What this will mean for consumers (web users) hopefully will be more and better services, in the first instance, by Google. I could make some recommendations in that regard, as I don't think the ads I obstruded onto other's webpages when I search are sufficiently compensated by the time-consuming awkwardnesses I have to crawl thru when using Google. The Google ads on refWrite are not at all those I would select from their stable, tho usually they are tolerable, at other times downr+t obnoxious. But that's another story.