News

Microsoft and Yahoo are on the brink of sealing an internet search engine merger which could rival the global dominance of Google.

Details of the much anticipated deal are expected to be announced today, but it is likely to include conditions that both companies will share revenue generated by search adverts on their websites. Under the deal, Yahoo will retain its own search engine, but any searches will be powered by Microsoft's Bing and could feature a 'powered by Bing' message on results, according to a source. 

 

Both companies would use Microsoft technology which delivers appropriate adverts alongside search results, while Yahoo will handle sales and customer service.

But it is not expected that Microsoft will pay Yahoo in advance. Yahoo chief executive Carol Bartz had previously said she would only join forces with the software giant for 'boatloads of money'.The world's largest software maker has made several bids for Yahoo over the last few years in a bid top expand its share of the lucrative online search market.

An offer of $47.5billion, or $33 per share, was withdrawn 15 months ago after resistance from Yahoo.
 

Microsoft is counting on its rival's search engine, which is the second most popular globally with an 8 per cent share of the market, to mount a challenge to Google, which has 67 per cent of the global audience according to recent data.

Despite spending billions on to upgrade its own search engine, it still holds just 3 per cent of the market.
The deal is likely to be subject to monopoly investigation.

Last year, the U.S. Justice Department decided a proposed merger between Google and Yahoo would give the former too much dominance and the deal collapsed.

The move comes after Google began work on a free operating system, Chrome OS, for personal computers that could threaten Microsoft's Windows franchise.