Microsoft and Yahoo are reportedly close to a search and advertising deal that could be announced next week. Microsoft executives are said to be in Silicon Valley for final talks, and CEO Steve Ballmer is reportedly monitoring their efforts.
The All Things Digital blog reported that the executives include Yusuf Mehdi, Microsoft's senior vice president for online; Satya Nadella, senior vice president for research and development; and Dr. Qi Lu, president of Microsoft's Online Services Group and a former Yahoo search executive.
The blog said the deal would involve "Microsoft paying Yahoo several billion dollars upfront to take over its search advertising business and guarantee certain payments back to Yahoo." That would be in line with Yahoo CEO Carol Bartz's comments in May that Yahoo was talking with Microsoft and any deal for Yahoo's search assets would require "boatloads of money."
All Things Digital said Yahoo is likely to lead in selling display advertising for the companies.
A deal could help Yahoo and Microsoft grab more of the search advertising market dominated by Google, which had 65 percent in June, according to comScore. Yahoo was second with 19.5 percent and Microsoft a distant third at 8.4 percent despite the launch of its Bing search engine last month.
Microsoft launched an unsuccessful hostile takeover bid for Yahoo in 2008, but Yahoo's board said the $47.5 billion offer was too low. That rejection infuriated stockholders and led to the resignation of Yahoo CEO and co-founder Jerry Yang and brought in Bartz.