Is a Microsoft/Yahoo deal back on?

The Internets are running wild with rumors that some kind of deal between Microsoft and Yahoo appears to be back in the cards.  It doesn’t appear this time around that we’ll end up with a combined “Microhoo” or “Yahcrosoft” but that the partnership could be instead based around a search and advertising deal intended to take on Google.  Apparently, the two companies are coming to understand the concept of “a rising tide lifts all ships” and CEOs Balmer and Bartz have apparently even met face to face to discuss options.

As has been proven time and again, Microsoft doesn’t like being number two in anything, let alone number three.  Google has, thus far, proven to be a considerable challenge for Microsoft, who continues to look for ways to combat the search giant’s growing significance in the market.  Although Google started out as a simple search company, its success in search has allowed it to make inroads into arenas that would have once been the sole province of Microsoft.  Take outsourced email, for example.  Colleges and universities across the country are teaming with both Google and Microsoft to outsource student email – for free.  Why would Google and Microsoft give away this service?  Ad revenue.  Once students graduate from college, their Google and Microsoft-hosted email accounts become ad targets for these providers.  By the way, when it comes to these services, Google is quite a bit ahead of Microsoft on the number of schools signed up.

It will be interesting to see what happens between Microsoft and Yahoo as they jointly take on the Google juggernaut in its home turf: search and ad revenue.

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