Microsoft To Buy YahooSince July 2009 Microsoft has been in talks with Yahoo, about buying the search engine. Recently, this deal seems much more likely, as the United States and European regulators have cleared the agreement.
Deals like this have to be passed by regulators as in some cases it could mean a lack of choice for consumers, with the Microsoft Yahoo deal however, this is not the case. If Google had tried to take over Yahoo, it would be a very different story, as I don't think the regulators would have allowed the deal to go ahead, because Google is too big.
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| | Microsoft wants to change Yahoo so that is powered by Bing. This basically means that Microsoft would use Yahoo as another place on the internet to put its search engine. AOL search is similar to this. AOL searches the internet using Google, but it displays the results on a different site to Google.
This is a great thing for companies like Microsoft and Google to do as it means that they can enhance profits by using multiple sites. For users however, this is not so good, because it means that there are less ways of searching the web, as there are still loads of search engines, but they are powered by the same main companies. |
Google currently owns around 90% of the search market, whereas Microsoft and Yahoo jointly own less than 10% of the market. So despite the two search engine joining together, they would still only own a minority of the search market. This amount may decrease even further if people, who currently use Yahoo, do not want to switch to Bing and would rather use Google.
Microsoft will be buying Yahoo at a huge cost, however with an annual net profit of $598,000,000 I don't think they would be making much of a loss. Despite this, only 12% of Yahoos profits will go to Microsoft in the 10 years that Microsoft will own the company.
So what happens after the 10 year Microsoft-Yahoo deal? I believe that after the 10 years when the deal comes to an end, what Microsoft will do will depend on what has happened.
If Yahoo and Bing jointly gain more of the search engine market, I believe that Microsoft will continue the deal, and may even consider fully buying Yahoo. If however all does not go to plan, I believe Microsoft will not refresh the deal, and instead, try to find yet another way to take on Google.
Links: Google Vs Microsoft - Set Up Google AdSense - Google Chrome Review - Google's 11th Birthday - Google AdSense for Search - Google's Empire - Microsoft Vs Apple
Posted By: Christopher (Admin)
Date posted: 22nd March 2010
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