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January 12, 2006

Microsoft and Yahoo talk search

Posted by David Hunter at 8:42 PM ET.

It’s not as exciting as the rumor that Microsoft had made an offer to acquire Yahoo that was later denied by Steve Ballmer, but Darryl K. Taft reports at eWeek that the two are huddling over search:

Harry Shum, the Beijing-based managing director of Microsoft Research Asia, said he has recently spoken with the head of Yahoo Research about the issue of enhancing search capabilities and competing with Google.

“I just talked to the head of Yahoo research in California,” Shum told eWEEK in an interview. “He was saying he can really appreciate how difficult it is to do technology transfers, and especially this large number of technology transfers that we have done.”

Moreover, despite competing, the two companies realize they have a common enemy.

“There is something called search relevance that Google has been ahead of most competitors in,” Shum said. “But the gap is closing. And Yahoo claims statistically that this difference does not even exist anymore between Google and Yahoo. MSN, with a lot of help from MSR [Microsoft Research] is closing the gap like crazy. We will be catching up with them in a matter of months. And something will be there. But that is only one problem—one very tough problem, however.”

You may recall that Yahoo has provided MSN Search results and ad placement via its Overture subsidiary but that is changing as Microsoft works to develop its own capabilities.

Filed under Coopetition, Google, MSN, MSN Search, Yahoo

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