It appears Yahoo is close to tying up an alliance with Microsoft which would see a major threat to Google’s dominance in the search engine market. Microsoft, who have only recently released their new search engine Bing, are looking a deal with Yahoo that will help them compete with Google.
According to the Times the latest discussions would see Microsoft run Yahoo’s search engine whilst Yahoo would handle the advertising for Microsoft. The deal could see Microsoft pay Yahoo $3 billion and also take a share of Microsoft’s advertising income.
Carl Icahn, who has a 5% stake in Yahoo and had tried to bring Microsoft and Yahoo together last year, says “I’ve been a strong advocate of getting a search deal done with Microsoft,” and that “It would enhance value if a deal got done because of the synergies involved.”
If the deal does go ahead it could turn the search engine industry on its head. Google who are without question the dominant search engine have a reported 65% of the market whilst Yahoo has 20% and Microsoft has 8.4%. With the release of Bing Microsoft are seeing a steady increase which some predict is already an indication that we may be seeing the demise of Google as the top dog.
With Yahoo’s profits increasingly dwindling and Microsoft becoming ever more serious in their crusade to overtake Google this deal could be on the cards very soon. If it does happen we are in for a very interesting and exciting year or so as we can sit back and see how the battle of the search engines plays out.