Yahoo, Microsoft Back Where They Started: Behind Google

Both companies scramble for options
By Kevin Spak,  Newser Staff
Posted May 5, 2008 12:56 PM CDT
Pedestrians walk below a Yahoo billboard in San Francisco, Tuesday, April 22, 2008. Yahoo, Inc. is expected to release quarterly earnings after the closing bell Tuesday.    (AP Photo/Jeff Chiu)
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(Newser) – The Microsoft/Yahoo deal looks dead, and at least one company is celebrating: Google. Both companies are exploring other deals, but none will be as potent as MicroHoo might have been, BusinessWeek reports. That’s good news for a certain search giant. “Its two main competitors are separate and floundering,” said one analyst. “We think Google's the winner.”

Both Yahoo and Microsoft have reportedly shown interest in AOL, though the Time Warner brand has underperformed for years. Alliances with or takeovers of MySpace or Facebook have also been rumored, but both sites have had problems generating ad revenue. Yahoo’s best hope, ironically, is a deal to outsource search advertising to Google, but regulators could quash that likely pairing.