Facebook In Talks With Yahoo For Strategic Alliance In Search - Report

By Alexandra Burlacu | Nov 20, 2012 09:12 AM EST

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Facebook and Yahoo female executives Sheryl Sandberg and Marissa Mayer are reportedly discussing a strategic partnership between their two companies.

The two Internet giants have already collaborated on several small projects such as sharing Yahoo news on Facebook, and they also recently agreed to settle a number of long-standing litigations over patents. The current talks, however, are expected to result in a much more fruitful partnership in regards to Web search.

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Facebook has already reckoned that it wants to boost its Web search facility, with founder and CEO Mark Zuckerberg noting that the social networking giant is "pretty uniquely positioned to answer the questions people have."

According to a Sunday Telegraph report on Saturday, Nov. 17, citing anonymous sources, Yahoo Chief executive Marissa Mayer has held discussions with Facebook Chief Operating Officer (COO) Sheryl Sandberg about how the two companies can join forces and work more closely together.

"Board members expect the talks to lead to much more substantial collaboration based around web-based search," reads the report.

For Facebook, forging a strategic alliance with Yahoo would allow it to take a significant step forward in Web-based search, helping it target advertising more efficiently and ensuring that the social network remains central to its members' lives.

For Yahoo, meanwhile, Facebook's massive user base of more than one billion members would be a godsend. Yahoo may have started out as one of the first major search engines, but currently it is trumped by rival search giant Google.

"An alliance between Facebook and Yahoo! Will pose a major threat to Google and stands to reorder the hierarchy of the world's biggest technology companies," notes The Sunday Telegraph. "A senior figure likened Yahoo!'s position to that of a minority party in a hung parliament, with the power to act as kingmaker by choosing another party with which to align itself."

Both Mayer and Sandberg worked for Google before assuming their current positions, and the two female executive powerhouses are expected to use their combined forces to launch a serious competitor to the search giant.

A Facebook - Yahoo alliance, however, doesn't pose a threat only to Google, it also casts doubts on Yahoo's relationship with Microsoft. Back in 2009, Yahoo signed a deal with the software giant to have Microsoft's Bing search engine powering all of Yahoo's search results, leaving Yahoo to deal with selling search advertising.

That alliance has reportedly been problematic, as Microsoft has not managed to attract the right "math geeks" to pose a serious challenge to rivals such as Google, "Yahoo insiders" told The Sunday Telegraph.

Yahoo is reportedly seeking ways to pull out of the 10-year deal with Microsoft, but its own batch of expert programmers has not left it in a position to make it on its own. Google dominates the market by a wide margin, with a roughly 66 percent share. Bing accounts for just under 16 percent of all searches taking place on the platform.

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