Yahoo and Microsoft close to agreeing a deal

After what can only be described as a long and difficult courtship, it looks increasingly likely that Microsoft and Yahoo are going to agree on a deal that will see Microsoft take over the running of Yahoo’s search operations.

In the deal Yahoo will be paid approximately $3 billion (£1.8 Billion) and take a share of Microsofts advertising revenue.

This is seen as the opportunity to create a genuine challenger to Google. Yahoo has a 19% share currently, Microsoft has 8%, Google 65%.

One of Yahoo’s largest investors Carl Icahn, who has built up a 5% holding said over the weekend ” I have been a strong advocate of getting a search deal done with Microsoft.”

Icahn joined Yahoo’s board last year after campaigningto oust the directors. He added “It would inhance value if a deal got done because of the synergies involved.”

It has yet to be seen how this merger will improve the search offering that is currently being offered by either search engine. Google’s success has been in its high levels of customer satisfaction with its results.

Microsofts new search engine offering “Bing” Launched in May has yet to make any significant traffic gains despite Microsoft having a reputed $100 Million marketing budget available.

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