Microsoft and Yahoo Talking About Advertising Deal ... Again

The ongoing talks between Yahoo and Microsoft over their reported advertising pact seems to be reaching a feverish pitch with reports indicating that a deal may be in the offing in next few weeks.

According to industry sources, both industry majors are coming closer to a deal which is likely to favour an arrangement that would allow Yahoo to sell search and display advertisements in the market, while Microsoft would deal with running the technology operations and providing the requisite infrastructure.

However critics of the proposed collaboration are quick to point out that such an arrangement is unlikely to make sense as separating assets or critical functions between the two organizations would be difficult to achieve and may even fail, if a proper joint organizational structure and a chain of command is not formed.

Another issue which may cause bottlenecks relates to apprehensions voiced by executives at Yahoo relating to giving up ownership of user related data derived from search results to Microsoft as this could create a serious vulnerability for Yahoo.

It is interesting to note that while Microsoft and Yahoo are still engaged in talks with each other, their primary competitor Google is continuing to increase its market share in the search engine market and more and more online advertisers are hooking themselves on to its Ad Words platform.

You can follow ITProPortal.com on Twitter @itproportal.

Our Comments

We can't believe it has been more than 15 months since Microsoft announced its intention to purchase Yahoo outright. Now, talks are apparently moving towards getting an advertising deal which would bring together the two giants. Will that be enough to counteract Google? Highly unlikely.

Related Links

Ad Execs Worry A Microsoft-Yahoo Pact Might Not Make Sense

(The Wall Street Journal)

Microsoft And Yahoo: Is A Deal Getting Closer?

(Barron’s)

Yahoo's Yang gets US$1 in rocky final year as CEO

(The Star Online)

Microsoft and Yahoo Still Working On Deal

(SiliconBeat)

Microsoft-Yahoo "Closer" Than Ever to Search Arrangement

(Media Post News)