No Yahoo Stake For Microsoft

    May 11, 2006
    WebProNews Staff

Microsoft did offer Yahoo CEO Terry Semel a deal where Microsoft would get a stake in Yahoo’s search business, but suggestions that Bill Gates was ready to buy Yahoo simply didn’t happen.

According to Semel’s comments in the Financial Times, the overheated guesswork that Microsoft had a Yahoo takeover in its sights was simply incorrect.

Conversations between the two firms concerned online advertising. Yahoo has been delivering ads to Microsoft’s online properties for a few years. The contract for that service from Yahoo’s Overture unit ends in a month, and Microsoft has already replaced those Overture ads with ones from its new advertising service, Microsoft adCenter.

Semel made his remarks during a recent event in New York organized by Syracuse’s Newhouse School of Public Communications. He said Microsoft expressed interest in Yahoo Search, but Semel was not inclined to sell:

“Microsoft taking over Yahoo – that conversation has never come up,” Semel said…”[We discussed] search, and Microsoft co-owning some of our search. I will not sell a piece of search – it is like selling your right arm while keeping your left; it does not make any sense.”

“My impartial advice to Microsoft is that you have no chance,” Semel said. “The search business has been formed.”

Of course, the phrase “piece of search” could be telling in itself, i.e., if you want to buy our search, you have to buy all of it, wink wink, nudge nudge.

To Semel, the future of search may not be entirely automated and algorithmic in nature. He admires search products in Asia where people instead of machines answer questions. His company has a stake in that kind of search with its Yahoo Answers; Microsoft plans to respond to that with its Windows Live QnA service.

“Is web search the killer application or just the first?” Semel asked in the report. “Knowledge search, as they call it in Korea, or social search, as we call it, has blown through the roof. There may be changing dynamics.”

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David Utter is a staff writer for WebProNews covering technology and business.