Yahoo is an impressive company. Despite plenty of hardships and often getting caught in the crossfire between Microsoft and Google, they still hold close to 20% of the world search market. Only Google (65% of the market) has a bigger share. That's why Microsoft wants so badly to partner up with Yahoo. If they can acquire the smaller company's search engine, they'll gain a substantial boost against their rival.
Despite Bing's massive first month successes, many still doubt that the new engine has any staying power. Yahoo, on the other hand, has a proven track record. Microsoft needs that extra twenty percent to shorten the massive gap between it and Google (Microsoft's only got an 8.4% share). That's why they've spent so much time over the last few years trying to iron out a deal, always failing in the end for one reason or another.
It's too early to uncork the champagne right now, but it looks like Microsoft and Yahoo might finally seal the deal. A cadre of high-ranking Microsoft executives flew down to Silicon Valley today to enter into what could be the final phase of talks with Yahoo. The specifics of the agreement they're working to iron out haven't leaked yet, but someone close to the talks says,
“It is down to the short strokes, for sure, it is just a question if we can finally close this.”
If they do manage to close this with an actual partnership, Google might start to have a reason to fear Bing. Microsoft alone isn't going to suck away their user base but, united with Yahoo, they might have a chance.
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