Yahoo And Facebook Partnership Rumored
November 19, 2012

Are Yahoo And Facebook Considering Search-Related Partnership

redOrbit Staff & Wire Reports - Your Universe Online

Reports have surfaced claiming that Yahoo CEO Marissa Mayer and Facebook COO Sheryl Sandberg are discussing a potential partnership that would center around a search engine.

The story, first reported by Katherine Rushton of The Sunday Telegraph on Saturday, cites unidentified sources and states only that the two companies are looking at ways in which the firms could "work more closely together." Furthermore, Rushton states that "board members" believe the talks will "lead to much more substantial collaboration based around web-based search."

The original story is "vague on the details of the partnership," most likely because the details of any potential Yahoo-Facebook alliance still need to be worked out, observes TechCrunch's Anthony Ha. And while Rushton claims that such a partnership could "reorder the hierarchy of the world´s biggest technology companies," helping Mayer's company win over Internet users and recruit engineers in the process, Ha says that could just be "wishful thinking on Yahoo's part."

Facebook and Yahoo put an end to their long-standing court battles and agreed to cross-license once-contested patents back in July. At the time, Yahoo's Ross Levinsohn said that the Sunnyvale, California-based company was "excited to develop a deeper partnership" with Facebook -- a partnership which resulted in expanded advertising and content-sharing alliances between the two Internet giants.

Furthermore, as CNET's Dan Farber points out, Mayer and Sandberg were both colleagues at Google. Mayer joined Google in 1999 and spent 13 years with the company as an engineer, designer, product manager, and executive, while Sandberg was Google's Vice President of Global Online Sales & Operations from November 2001 to March 2008.

Microsoft currently handles search for Yahoo, but Farber says that the deal "hasn't gone so well financially" and could be terminated by Mayer's company next year. While CNET reports that Yahoo generated just "a few million" from search-related ad revenue this year, Google has earned approximately $40 billion.

So how would a partnership with Facebook help Yahoo cut into their search rival's massive earnings lead?

"The root of what Yahoo and Facebook might do together would be social and mobile -- a social search engine that is ideal for mobile usage," Farber explains. "Combining data gleaned from Yahoo's 700 million users and Facebook's 1 billion users (and resolving any privacy issues in such a plot) would give a social-oriented search engine centered around answering questions a lot of information to process, refine and monetize."

"While the two companies might be motivated by the engineering challenge, the opportunity to create a new kind of search engine and give Google a cause for concern, there is a massive amount of money is search," he added. "Whether the two companies join forces remains a question at this point, but the opportunity is real and could bring immense profits for both at Google's expense."