US software giant Microsoft and web portal Yahoo were reported to be exploring merger or alliance to better compete against Google, but both remained tight-lipped about the rumours.
Yahoo's stock price leaped about 18 per cent and Microsoft's slipped slightly after The Wall Street Journal and The New York Post reported that the technology titans might unite to take on Internet search powerhouse Google.
The Journal backed off the report late Friday, citing anonymous sources as saying that merger discussions took place in recent months but "are no longer active" but the two companies "may still explore other ways of cooperating." The rumours are at odds with the mood at Sunnyvale, California-based Yahoo, where morale and optimism have been buoyed in recent months with the successful launch of its new Panama online advertising platform.
Moreover, for Microsoft to acquire Yahoo or make a deal for it to handle the Windows Live online search business would be an out-of-character admission of failure by the world's largest software company.
When contacted, representatives from Yahoo and Google said they would not comment on speculation or rumours. Analysts were sceptical of the notion of an acquisition, saying Yahoo was regaining its footing in the market after a rough patch and had little to gain by selling out to Microsoft. "Count me among the sceptics; I don't think it's going to happen," said analyst Matt Rosoff of Directions on Microsoft, which tracks the Redmond, Washington-based firm. "I don't understand what Yahoo would get out of the deal, including that there are people there who don't want to work for Microsoft."
Yahoo co-founder Jerry Yang is reportedly among those averse to working for Microsoft, which technology entrepreneurs in California's famed Silicon Valley area notoriously regard as a menacing institutional empire.
While acquiring Yahoo would boost Microsoft's ability to compete in online services, integrating the firms' operations could present "thorny cultural and technological challenges," according to Datamonitor analyst Ri Pierce-Grove. Microsoft and Yahoo could easily be discussing some kind of partnership, perhaps in the area of Internet search or e-mail where Yahoo has profited and Microsoft has suffered, according to Rosoff.
"An outright acquisition would be very expensive," Rosoff said. "The future growth is not there; there are different cultures, and there is a ton of overlap implying one would have to shut down what they have to offer." A year ago, the two had explored the idea of combining to form a greater competitor to search-engine giant Google Inc., but the talks "led nowhere." Rosoff pointed out that the rumoured talks between the companies a year ago had yet to be confirmed.
Combining the online search engines of Yahoo and Microsoft would give the companies about a quarter of a market ruled by Google, which is based in Mountain View, California. "Microsoft and Yahoo are strongly motivated to find ways to dethrone Google... and the combined mass of the two companies' client and consumer bases could generate a viable competitor to Google on both the desktop and the mobile device," Pierce-Grove said in a written analysis.
SOURCE : THE TIMES OF INDIA
Yahoo's stock price leaped about 18 per cent and Microsoft's slipped slightly after The Wall Street Journal and The New York Post reported that the technology titans might unite to take on Internet search powerhouse Google.
The Journal backed off the report late Friday, citing anonymous sources as saying that merger discussions took place in recent months but "are no longer active" but the two companies "may still explore other ways of cooperating." The rumours are at odds with the mood at Sunnyvale, California-based Yahoo, where morale and optimism have been buoyed in recent months with the successful launch of its new Panama online advertising platform.
Moreover, for Microsoft to acquire Yahoo or make a deal for it to handle the Windows Live online search business would be an out-of-character admission of failure by the world's largest software company.
When contacted, representatives from Yahoo and Google said they would not comment on speculation or rumours. Analysts were sceptical of the notion of an acquisition, saying Yahoo was regaining its footing in the market after a rough patch and had little to gain by selling out to Microsoft. "Count me among the sceptics; I don't think it's going to happen," said analyst Matt Rosoff of Directions on Microsoft, which tracks the Redmond, Washington-based firm. "I don't understand what Yahoo would get out of the deal, including that there are people there who don't want to work for Microsoft."
Yahoo co-founder Jerry Yang is reportedly among those averse to working for Microsoft, which technology entrepreneurs in California's famed Silicon Valley area notoriously regard as a menacing institutional empire.
While acquiring Yahoo would boost Microsoft's ability to compete in online services, integrating the firms' operations could present "thorny cultural and technological challenges," according to Datamonitor analyst Ri Pierce-Grove. Microsoft and Yahoo could easily be discussing some kind of partnership, perhaps in the area of Internet search or e-mail where Yahoo has profited and Microsoft has suffered, according to Rosoff.
"An outright acquisition would be very expensive," Rosoff said. "The future growth is not there; there are different cultures, and there is a ton of overlap implying one would have to shut down what they have to offer." A year ago, the two had explored the idea of combining to form a greater competitor to search-engine giant Google Inc., but the talks "led nowhere." Rosoff pointed out that the rumoured talks between the companies a year ago had yet to be confirmed.
Combining the online search engines of Yahoo and Microsoft would give the companies about a quarter of a market ruled by Google, which is based in Mountain View, California. "Microsoft and Yahoo are strongly motivated to find ways to dethrone Google... and the combined mass of the two companies' client and consumer bases could generate a viable competitor to Google on both the desktop and the mobile device," Pierce-Grove said in a written analysis.
SOURCE : THE TIMES OF INDIA
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