Microsoft Still Wants To Acquire Yahoo’s Search Assets

In the latest development in the ongoing Microsoft-Yahoo saga, Redmond is showing renewed interest in a search deal with its struggling rival. After several failed attempts to acquire all or part of Yahoo, Microsoft CEO Steve Ballmer said the company should ink a deal to acquire Yahoo’s search business “sooner than later,” according to a report in The Wall Street Journal.

Ballmer wants to build a “credible competitor” to Google. In fact, if Microsoft acquired Yahoo’s search assets, it would gain a 30 percent market share, about half what Google owns, according to the latest comScore figures. The search-advertising market, in effect, would be a duopoly, with Google and Microsoft together owning about 90 percent.

Ballmer: Let’s Move Quickly

“I think good ideas are usually better done quickly than slowly, so it would probably be better for both of us, and certainly for Yahoo, if we were to do it sooner than later,” Ballmer told the Journal in an interview. “But at the end of the day, that would have to be something Yahoo would be as interested in.”

Yahoo couldn’t immediately be reached for comment, but a spokesperson on Friday declined to speak to the Journal about the Ballmer interview. The Journal instead cited people familiar with the matter, revealing Yahoo’s board is undecided on the issue. However, Yahoo board member Carl Icahn has previously given a deal his approval.

“This is complicated for Yahoo because its shareholders and board probably want some sort of deal at this point, given everything that’s going on,” said Greg Sterling, principal analyst at Sterling Market Intelligence. “Microsoft only wants to buy the search business, which compromises Yahoo’s position in advertising.”

Stripping Yahoo Bare

Allowing Microsoft to surgically remove the search piece, Sterling said, could potentially undermine Yahoo’s display-ad business. ComScore’s data backs up that assertion, demonstrating a strategic dimension…