It’s Microhoo, but not as we know it
It's been more than a year since Microsoft decided not to bother with buying Yahoo!, after growing tired of the stern resistance put up by its then leadership.
In retrospect it looks like Jerry Yang and friends did Microsoft a favour, as Yahoo!'s share price is around half the $33 Microsoft was prepared to pay for it, and Microsoft has used some of that saving to develop its Bing search engine.
Rumours of some kind of search deal between the two companies have never totally disappeared, however, and it was widely reported last week that the two companies - Yahoo! now headed-up by Carol Bartz - are close to signing-off some kind of deal in which Microsoft pays Yahoo! a bunch of cash to take over its search advertising business.
The sense of expectation increased further over the weekend, when Reuter interviewed Carl Icahn, a five percent shareholder and board member of Yahoo!, who was so incensed by the board's refusal to accept Microsoft's offer last year he threatened to replace them all in a proxy fight.
While he wouldn't comment on any current negotiations, he did stress his enthusiasm for such a deal. "I've been a strong advocate of getting a search deal done with Microsoft," Icahn told Reuters. "It would enhance value if a deal got done, because of the synergies involved."
It's generally considered the some kind of collaboration between the two companies is their best chance to take on Google, which currently dominates the Internet search market. Google itself contemplated some kind of cooperation with Yahoo! a year ago and it's unlikely to be pleased if and when this deal is completed.
