Yahoo Spikes Over $14 On Microsoft Deal Talks

The market likes the idea of a Yahoo-Microsoft search-ad partnership–as it should.

Yahoo is barely clinging to a viable search business, and Microsoft’s is so small as to be irrelevant.  Put the two together, though, and they’ll have nearly 30% of the US market.  That, finally, is a viable alternative for advertisers. 

Yahoo, meanwhile, is still the big-dog in display ads.  Better for Yahoo to focus on those ads and let Microsoft worry about competing with Google’s engineering team on search algorithms.

A search-ad deal would help Yahoo’s bottom line, by allowing it to save engineering costs. It would also allow it to refocus the rest of its business.  So what’s not to love?

See Also: Ballmer, Bartz Finally Talking Search Deal

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