Microsoft closing in on Yahoo search business

Microsoft is said to be close to completing the purchase the search engine section of its rival in online search Yahoo. Just over a year ago, Microsoft launched a $45 billion bid for Yahoo in its entirety, the then CEO, Yahoo co-founder Jerry Yang rejected the bid saying it undervalues Yahoo.
Yahoo later invited Microsoft to make and improved bid which Microsoft refused to do saying its not interested any more however it is still interested in acquiring Yahoo’s search business. Rejection of Microsoft original offer contributed to the replacement of Jerry Yang with Carol Bartz as Yahoo CEO.

The new offer Microsoft and Yahoo are close to completing is said to be about $3 billion, but in addition to the cash Microsoft will be paying for Yahoo search business, it will also share revenues from the company for many years to come. If the deal is complete as expected, this will take Microsoft’s share of online advertising in US close to 30% which is the combination of Microsoft’s current 8% and Yahoo’s 20%, this still put Microsoft share of the online marketing at less than twice the market share of Google who controls 65% of the market share in US.

You can discuss issues to do with Microsoft and Yahoo at UK Webmaster Forum, registration is free.

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