Yahoo rallies on renewed hopes for Microsoft deal

Jul 17, 2009 By DEBORAH YAO , AP Business Writer
Yahoo logo

Yahoo Inc. shares rose 4 percent Friday amid speculation it will team up with Microsoft Corp. in an online search advertising partnership aimed at mounting a more serious challenge to Google Inc.

The Sunnyvale, Calif.-based company also got a slight boost after Google released its second-quarter earnings late Thursday. Google executives say larger advertisers have returned to the Internet after being absent earlier in the year, raising hopes that Yahoo's second-quarter results, due out Tuesday, might not be quite as dreary as some investors feared.

and Microsoft have been meeting in the this week and could sign a deal as early as next week, according to AllThingsD, a technology blog that cited unnamed people at both companies.

Yahoo and Microsoft declined to comment.

But Yahoo CEO Carol Bartz has publicly said she will join forces with Microsoft if the price is right and she is convinced her company will still have adequate access to search data.

That information about Web surfers is important to Yahoo because it still wants to track user preferences so it can figure out what kind of advertising is likely to generate revenue-generating clicks in its own marketing network.

The rivals have been discussing an alliance since 2006, but Yahoo's previous two CEOs - Terry Semel and - couldn't come to terms with the world's largest .

If the latest round of talks are fruitful, analysts believe Yahoo will be get a lump sum of cash and billions of dollars more in guaranteed payments spread over several years while reaping annual savings of at least $500 million from not having to run its own search engine.

The potential for a deal helped drive Yahoo shares up 65 cents to close at $16.84.

Shares in Redmond, Wash.-based fell 15 cents, or 0.6 percent, to close at $24.29, while Mountain View, Calif.-based Google lost $12.35, or $2.8 percent, to $430.25.

Yahoo's search engine currently holds a nearly 20 percent share of the U.S. search market, leaving it a distant second to Google's 65 percent, according to comScore Inc. Microsoft's search engine ranks third with an 8 percent share.

On Friday, Oppenheimer analyst Jason Helfstein said he's heartened by improved ad trends at Google. Although it's not clear the same would be true for Yahoo, Google's experience does give him greater confidence that Yahoo can exceed his revenue and profit estimates.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: EU Parliament votes to break up Google

add to favorites email to friend print save as pdf

Related Stories

Yahoo shares rise following Microsoft ad-deal report

Apr 13, 2009

SAN FRANCISCO _ Shares of Yahoo Inc. bucked the downward trend for technology stocks Monday and gained more than 7 percent, following reports late last week that the company is in serious discussions with Microsoft Corp. ...

Microsoft, Yahoo! in search, ad talks

Apr 10, 2009

Microsoft and Yahoo! have held "early discussions" about possible Internet search and advertising partnerships, a leading Silicon Valley technology website reported on Friday.

Yahoo CEO: Shake-up needs more time, not Microsoft

Jun 03, 2009

(AP) -- Yahoo Inc. Chief Executive Carol Bartz has a message for investors hoping for a quick fix at the slumping Internet company or for an online search partnership with Microsoft Corp. - don't expect either to happen ...

Yahoo's feeble 1Q triggers nearly 700 more layoffs

Apr 21, 2009

(AP) -- Yahoo Inc.'s first-quarter results tread familiar ground as the Internet company's financial erosion triggered another round of layoffs and management promised better days ahead.

Recommended for you

EU Parliament votes to break up Google

10 hours ago

The European Parliament voted overwhelmingly for the break-up of Google Thursday in a largely symbolic vote that nevertheless cast another blow in the four-year standoff between Brussels and the US Internet ...

Toyota finds new air bag issue, recalls more cars

14 hours ago

Toyota Motor Corp. recalled more than 40,000 vehicles in Japan on Thursday as part of a worldwide scare over defective air bags and is investigating a new type of air bag problem that could lead to further recalls.

Netflix sues Yahoo CIO for alleged kickbacks

Nov 26, 2014

Netflix is suing a former company vice president who is now chief information officer at Yahoo, accusing him of receiving money from vendors he hired to work with the video streaming company.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.