After a year of bad blood, Microsoft, Yahoo talking again

Nearly a year after Microsoft Corp.'s fractious takeover bid for Yahoo Inc. fell through, the two companies are reportedly talking business again.

The two companies aren't talking about a merger or buyout but may be talking about a plan for joint search efforts and ways to partner advertising projects, according to Kara Swisher, a blogger for The Wall Street Journal.

Microsoft and Yahoo haven't exactly been the best of friends since takeover talks were abandoned last May, but their mutual rival, Google Inc., may have brought them back together. Just this week, Hitwise, a company that measures online traffic, reported that Google accounted for slightly more than 72% of all online searches conducted in the U.S. during March. In the same time frame, Yahoo Search grabbed 16%, while Microsoft's MSN Search garnered only 5.5%.

"It's in the best interest of both companies to get a partnership together on search," said Dan Olds, principle analyst with the Gabriel Consulting Group. "Google owns about two-thirds of the search market now and isn't showing any signs of losing momentum. Yahoo and Microsoft need to pool their efforts in order to have any chance of blunting Google's rising market share.

And Olds also noted that since Yahoo CEO Carol Bartz wasn't at the helm of the online company during its 2008 struggle with Microsoft, tensions between the two firms may be easing.

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