Yahoo and MSN back in talks – Google looks on

MSN and Yahoo! are back in talks.  You’ll remember that MSN approached Yahoo! with a $40 billion evaluation which was later sweetened by $7.5 billion. On refusal Carl ICahn started getting vocal with his 4% of Yahoo! and a threat to depose 10 of Yahoo’s directors.

Google are in the sidelines watching as the number 2 and 3 in the market (leaving Yandex out of European figures for the moment) disuss becoming a possible number 2 with a third of search market share. something not to be sneezed at with the value of search valued at about $40 billion per annum and set to double by 2010.

It’s certainly all to play for. The test of Google adsense being used in a percentage of Yahoo’s paid search ads last month has attracted the anti trust boys so the previous avenue of a commercial agreement which would see Yahoo as inventory for Google sales looks like its being put on the back burner.

Where will it all end? Without Yahoo, MSN will struggle to grow or even to maintain marketshare with their search offering being so limited in comparison to the products offered by the other two goliaths. Will MSN pursue the social media route instead with it’s proposed talks with Facebook.

Exciting stuff.

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