Unlike last year when it was all about merger or takeover or something of that sort, this time, the talks are about a possible advertising deal that would surely help both companies. According to a report from well-known technology blog AllThingsD, talks between the two companies actually re-started a few weeks ago and Yahoo’s new Chief Executive Officer Carol Bartz and her counterpart from Microsoft Steve Ballmer met to discuss the possibilities of a partnership.

 

You don’t have to be a so-called “source familiar with the talks” to figure out that Microsoft would hugely benefit from Yahoo’s search volume in the case of deal. Furthermore, without that big piece of the puzzle in place, Microsoft would get its chance to become the No.2 of the Web search industry and possibly give Google a run for its money. 

 

Last year, Yahoo turned down a $47 billion offer that Microsoft made to takeover the Web search portal, but with Carol Bartz at the helm, Yahoo is beginning to look different. The former Amazon.com CEO is already implementing several changes in the company’s structure, but one thing she won’t do: sell Yahoo’s search business. That’s a fact she strongly stated. However, a Microsoft-Yahoo deal under which Microsoft would sell search ads for Yahoo, and Yahoo, in turn, would sell display ads on Microsoft properties, isn’t a thing you throw away before taking a very close look at. 

 

Microsoft has been making efforts to catch up with Google in the Web search market or at least show sings that it has the capability. The software giant even hired top search execs and engineers that left Yahoo such as Qi Lu, a well-known technologist who is now president of Microsoft's Online Services Group. Nevertheless, without the Web search volume only Yahoo can provide, all efforts seem to be in vain. Currently, in terms of audience and base of advertisers Google is incomparably higher than Microsoft. 

 

Microsoft will most likely unveil the results of its latest efforts in technology research and development this summer when it also plans to take the wraps off a major overhaul of its search engine. The capabilities of the new search service are undeniable, Microsoft executives said, but the fact that Google is way ahead of them when it comes to audience and advertisers remains undeniable.