Microsoft's Bing could suffer if Yahoo becomes unstable, since Yahoo gives the search engine scale in its battle against Google.
Microsoft is apparently "very worried about making sure there is a
stable Yahoo," according to anonymous sources speaking to AllThingsD's
Kara Swisher. If true, those comments would highlight the interdependency
between the two companies' search and advertising businesses, where there is a
considerable amount of overlap.
, "a number of private equity firms and other investors"
have been feeling out former News Corp. President and COO
Peter Chernin about his interest in possibly assuming a leadership role at
Yahoo. She also insists, however, that "there is no active plan for
Chernin to join Yahoo or its board, nor is he currently part of any possible
Yahoo CEO Carol Bartz appeared upbeat at
this year's Web 2.0 Summit, downplaying the company's former aspirations in the
search arena. Microsoft's Bing now powers Yahoo's back-end search, something
she described as a "win." She also referred to Facebook as "competition."
Yahoo has unveiled a variety of new features designed to compete directly
against similar offerings from the likes of Google and Facebook. Its
Yahoo Local Offers
, which involves partnerships with companies such as
Groupon and LivingSocial, will try to leverage those users seeking local
businesses from their mobile devices; that service is currently in the
Meanwhile, the new Yahoo Messenger beta offers users the ability to share
their status across networks and "like" Facebook, Flickr and Twitter
updates. Its extensive interoperability with Facebook suggests that, Bartz's
comments aside, Yahoo recognizes the borderline-ubiquitous nature of the social
But rumors abound that Yahoo is also in serious trouble, with anonymously
sourced reports from both TechCrunch and AllThingsDigital suggesting that
anywhere from 10 to 20 percent of its consumer products division could be cut.
Meanwhile, the company has broadened its pipeline of crowd-sourced content, the
rest of its $100 million purchase of Associated Content, in a bid to remake itself
as a media portal.
"Yahoo is always evaluating expenses to align with the company's
a Yahoo spokesperson said in a statement
. "However, a 20 percent
reduction in Yahoo's workforce across the board is misleading and inaccurate."
Should Yahoo find itself in serious trouble, the effects would ripple to
Microsoft, most immediately in its attempts to carve search market share away
from Google. Bing depends on Yahoo's search engine market share for scale as it
seeks to compete against Google's dominance, and Microsoft depends on Bing in a
number of ways-not only for the online ad revenue the service generates, but
also for its accumulated data, which helps inform other Microsoft initiatives
such as cloud computing.