Yahoo! and Microsoft CEOs back in internet strategy talks

13 Apr 2009

Yahoo! CEO Carol Bartz and Microsoft CEO Steve Ballmer are understood to be holding formal talks – but not about an acquisition. Rather, search ads and content deals are in the works.

Last year, Microsoft abandoned its US$44.6bn takeover plans for Yahoo!, after previous CEO Jerry Yang and the then board bungled the deal.

In the aftermath, Ballmer (pictured) raged: “We won’t pay a dime for Yahoo!”

Sticking true to his word, the content of Microsoft’s formal talks with the new Yahoo! chief executive, who took up the role in December last, appear to be about better synergies between the two companies in the burgeoning online advertising space – effectively how they can square up against Google in this space.

According to a report by the Wall Street Journal columnist Kara Swisher, the talks are preliminary and wide-ranging.

The discussions are not about a renewed acquisition, and there are no guarantees that any kind of deal may be reached.

One potential scenario being mooted in the report is the two companies effectively swapping online assets and providing services to each other.

For example, Microsoft, which reorganising its online efforts under the Kumo brand, may run both companies’ search advertising, while Yahoo! takes over all of the display and premium advertising.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years