Now that Yahoo has finally hired a CEO, the Yahoo-Microsoft search deal will be quickly consummated, Kara Swisher’s sources say.
We sure hope so. Both of these companies are dead in the water in search without each other, and their collective position is getting worse all the time.
Kara: Sources close to Microsoft (MSFT) said the company has readied its proposal to be floated to the Yahoo board. And its CEO Steve Ballmer has been vocal about wanting to do a deal quickly.
“It’s ticked and tied,” said one person who has spoken to Microsoft execs of late, who predicted it could be signed as soon as Yahoo’s earnings on January 27.
Said another source at the software giant: “We’ve just been waiting for management clarity to move.”
BoomTown could not get further details of the proposal, but it is likely to be similar to past ones Microsoft has offered, with a small payment upfront and a long-term and large amount of guaranteed revenue.
While some on the Yahoo (YHOO) board, including Yang, remain on the fence about Yahoo essentially outsourcing its search business to Microsoft in exchange for a big pile of money, it seems to be the company’s only choice.
Screw Jerry. It’s not the “only” choice. It’s the smart one. Why on earth would Yahoo want to continue to reinvent the wheel in a business it has already lost?
Meanwhile, here’s the risk to the deal:
Bartz must also weigh in, of course, and she is someone who has more of an affinity for techies and might think Yahoo can continue to compete in what is turning into a pricey arms race in search between Microsoft and Google (GOOG).
That is exactly what worries us about Carol’s lack of consumer Internet experience. The reasons why Yahoo’s homegrown search business is doomed are not obvious from the outside (where it seems that if only the company tries a bit harder or builds a better product it should win. Just ask Barry Diller). We hope Carol will quickly see the light here, but we fear that she won’t.
Graphic: Kara Swisher
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