Interesting Note to the Microsoft - Yahoo Deal

The media has been buzzing over the weekend about the potential hostile takeover of Yahoo by Microsoft for something in the neighborhood of 44 billion dollars. While people hash over the pluses and minuses of such a deal what I found worth noting was a sentence tucked away in this recap of the situation.

“Indeed, Google and Yahoo have already begun hammering out a partnership that would not only outsource Yahoo’s search, but would have the companies work together in other key areas that could strengthen both their hands.”

This is what I expected might happen soon when I wrote several weeks ago Something Curious At Yahoo! These Days.  It seemed that Yahoo! was showing signs they wanted to stop being a search engine and return to focusing on being a portal.  Now with the Microsoft threat those plans seems to have been sped up.  Whether it will matter now is unclear.  If a rival bid comes along it may but if Microsoft’s bid is successful we certainly won’t see Google results on Yahoo! search.

There is a lot of posturing going on by Google, Yahoo!  and others right now regarding how generous Microsoft’s offer is and/or whether consumers should feel threatened by a Micro-Hoo combination.  Regardless what your take is on either of those issues it will be hard for Yahoo! not to accept the Microsoft proposal given the financial bonus it would bring their share holders.