Microsoft and Yahoo Finally Making a Deal?

7/17/09

Microsoft and Yahoo, after complicated negotiations and a few false starts, may be very close to announcing a deal wherein Redmond, WA-based Microsoft will take over the search advertising business run by Sunnyvale, CA-based Yahoo. The latest news, from a report on All Things Digital (and many other subsequent articles), indicates a formal announcement could be made as soon as next week. Microsoft executives are currently meeting with Yahoo in California to discuss the deal, possibly worth billions of dollars, and one that could give Microsoft an edge in dealing with its main search rival, Google.

According to reports, the discussions include notable Microsoft execs Satya Nadella, head of research and development in the online services division, senior vice president of the online audience business group Yusuf Mehdi, and president of the online services group (and former Yahoo executive) Qi Lu.

The latest round of talks between the two companies began in March, although they have nearly fallen apart several times due to the sheer complexity of the arrangement. But both sides have a lot to gain from settling those details. The money gained by Yahoo, both directly and in savings, would be a help as its search market share is attacked by both Google and Microsoft’s own new engine, Bing. And with Google so dominant, Microsoft needs all the leverage it can attain in the search arena.

Eric Hal Schwartz was an intern in Xconomy's Seattle office. Follow @

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