Microsoft, Yahoo! Start Talking Again

Talks between Microsoft and Yahoo! over a possible search advertising partnership have begun anew, according to multiple reports. The reports came from sources familiar with the situation.

Yahoo! Chief Executive Carol Bartz and Microsoft CEO Steve Ballmer met last week as part of the discussions. Discussion are still in early stages, but do not include a possible acquisition by Microsoft, an earlier attempt of which was fought off by Yahoo! last year.

One outsider who had been told of the discussions said:

“It’s long past time. With Google’s huge market share, these two need to work together and the problems they had should be put in the past.”

According to the WSJ, possible scenarios would include:

• Yahoo outsourcing its entire search engine to Microsoft to cut costs
• More limited deals, such as Yahoo selling some premium display advertising on Microsoft's Web sites and Microsoft selling ads next to Yahoo search results

The only sure thing at this time is you have be thinking that Jerry Yang has been smacking himself in the head (for some time!) for not taking Microsoft's offer last year.