At the finals for the CNET Technology Awards last year I happened to be sitting next to an analyst who specialised in search technology for one of the big banks. During our rather interesting discussion over dinner (extremely different views on the search market and who might win out) I made the wild speculation that a big deal you may see was Microsoft buying Yahoo! to which he nearly spat his wine across the table.

To understand more about why this is a potential goer see our previous blogs which give a background to the current battle positions of the major search players Yahoo!, AOL, Microsoft and Google.

1) How Microsoft won the desktop but lost the war.
http://www.search-engine-war.co.uk/2005/10/how_microsoft_w.html

- explains Microsoft’s options

2) Google buys 5% stake in AOL

http://www.search-engine-war.co.uk/2005/12/google_aol_deal.html

- effectively this closes the AOL option for Microsoft.

Considering the way things have been going it was not surprising to read the following rumour on Microsoft Watch today:

“…there were rumors this past weekend that Microsoft offered $80 billion for Yahoo. Yahoo was said to have rejected the bid as too low. On Tuesday, even though neither party would comment, talk of a potential Yahoo-Microsoft deal of some kind sent Yahoo shares up 4.4 percent.“
Mary Jo Foley
http://www.microsoft-watch.com/article2/0,2180,1907746,00.asp