Monday, November 19, 2012

Facebook Inc (NASDAQ:FB) and Yahoo! Inc. (NASDAQ:YHOO) joining forces for search?

Facebook Inc(NASDAQ:FB) and Yahoo! Inc.(NASDAQ:YHOO) might come together and work on a joint effort for a search engine, the Sunday Telegraph reported.

Yahoo's Marissa Mayer and Facebook's Sheryl Sandberg are apparently in talks to forge an alliance together, the report said.

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However there are other reports which claim that the two companies are not in talks regarding a search partnership. This is from AllThingsD, which has a good track record of covering Yahoo. According to this report, Microsoft would not allow Yahoo to get out of its long-term search contract.

Cnet is however connecting a lot of dots to arrive at some of a scenario here.

Mayer and Sandberg are both former colleagues at Google and they would understand, better than anybody, the dynamics of the search business and its criticality.

Yahoo had a robust search engine once (though it now outsources its search to Microsoft) and Mayer is currently in boosting all its products and services including the search business.

Facebook founder Mark Zuckerberg has gone on record to say that search is going to be a big business for Facebook, considering the kind of database that it has access to.

"There is a big opportunity in search, evolving to giving a set of answers to a specific question and Facebook is uniquely positioned to do that," were his exact words in September.

Yahoo and Facebook have also been trying to integrate their activities with Yahoo allowing access to the social networking site from within its platform. They have also resolved their patent disputes.

When one considers all these things together the story does not appear so far-fetched.

"The door could be open for a Yahoo-Facebook alliance, but it could take years to create a competitive search engine," Cnet said.

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