Wall Street and other pundits had mused that Microsoft would need to buy Yahoo to move up from its long-held third place in the online search industry, and to, therefore, make more online ad money. Yahoo ranks second only to Google in online search.
But, according to reports, Microsoft’s Yusuf Mehdi told analysts at the event that Microsoft had all the pieces it needed to move forward in the online space. He said Redmond was not considering any additional large buyouts, following its acquisition, announced late last week, of online ad outfit aQuantive for $6bn.
Mehdi also reportedly said Microsoft would continue its partnership with Yahoo, which includes working to ensure their respective instant messaging networks are compatible.
He also repeatedly said the display advertising market, which encompasses videos, banners and other graphic ads, would soon boom and that Microsoft would now be in a strong position to cash in on it, thanks to its aQuantive buy. aQuantive would be a game changer for Microsoft, thanks to its ad placement services and ad network called DrivePM, Mehdi told analysts.
While Microsoft’s ability to put its MSN unit in the forefront of online search remains to be seen, a Microsoft-Yahoo merger does seem increasingly unlikely.
