Yahoo and Microsoft said they might talk about a partnership and now they are
This might be big, at some point in the future. New Yahoo chief executive Carol Bartz and Microsoft chief executive Steve Ballmer have had some preliminary, face-to-face meetings over the last few weeks about a potential search and advertising partnership, according to BoomTown.
In case such discussions sound familiar, it’s because — after a tortured attempt by Microsoft to buy Yahoo last year — the two companies have already been sending signals that they’re willing to sit down together again.
“You all know that I would like to figure out how to pool somehow Microsoft and Yahoo,” Ballmer reminded analysts in late February. “I’m hoping that’s a reasonable conversation to have with new management at Yahoo.”
For her part, Bartz has been sending somewhat more muted signals in public.
“I said this to Mr. Ballmer, I will not negotiate with you and 30,000 of my closest friends. I will negotiate privately,” Bartz told a crowded room of investors at a conference in early March. “If something happens,” she said to them, “you will know about it then.” Then, Bartz added that Yahoo needs to somehow maintain access to its search data, in part because it needs this information to help it figure out which ads might be most relevant to a given user.
This sensibility is reflected in today’s report about the discussions. An acquisition is not on the table, and a plethora of ideas are being discussed. One possibility mentioned would be for Yahoo to manage Microsoft’s online display and premium advertising business while Microsoft would run the search advertising business.
Microsoft and Yahoo continue to struggle with search market share — Yahoo took another hit on that front today in losing toolbar placement deals to Google and to, um, Microsoft. Maybe, at some point, the two companies can figure out a way to make the sum of a deal more than the parts they have to work with now.
[Photo via SuperStock.]
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About the Author, Eric Eldon
Eric currently covers digital media technology and business news, especially what's happening on social networks and their platforms. He also writes and edits stories about venture capital, and lots of other stuff, too. He started at VentureBeat in the spring of 2007, half a year or so after Matt Marshall left his reporting job at the San Jose Mercury News to found the site. Eric previously cofounded a startup called Writewith, that was building editorial software for newspapers and other groups of writers. The startup didn't work out, but he learned a lot.