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Microsoft Mulls Google Deal
Posted on November 11, 2003

Microsoft may be interested in using Google technology to improve its own search facilities, but despite rumours it is unlikely to buy the firm, according to some experts. Meanwhile, continued merger and acquisition activity in the search technology sector is reducing options for firms wanting search technology, and search placement services.

According to reports in the New York Times, Microsoft approached Google earlier this year and discussed the possibility of a partnership or a buyout. However, both companies have refused to comment further. Google is currently considering going public, which would be one of the biggest flotations of an internet firm in years. Meanwhile, Microsoft appears to be reassessing its options for search technology.

Microsoft has announced that a deal linking its MSN portal site with search technology provider LookSmart will end soon and will not be renewed.

As MSN is currently using services from other search technology companies it is likely that it will try to develop its own technology, or make an acquisition. However, the situation remains fluid.

The marketplace has significantly altered recently, because Yahoo! bought pay-for-placement search company Overture, which itself recently acquired Fast's Alltheweb search facility as well as AltaVista.

Despite this acquisition activity, experts said it is unlikely that Microsoft will purchase Google. Danny Sullivan, editor of Search Engine Watch, argued that Google is too independent. "Google has never suggested that it is a company looking to sell out to anyone, and there is no pressing reason why it would need to sell," said Sullivan.

Instead, Sullivan suggested that Google might work with Microsoft to provide MSN with search services. He added that MSN currently uses Overture and Inktomi search technology for most of its requirements. However, Sullivan noted, "As Yahoo is a much bigger competitor than Google to MSN search, the idea of switching to Google is certainly one that MSN is exploring.

The main issue in the past was that Google was seen as a competitor. It still is, but now so is Yahoo."

Sullivan said one reason why Google is unlikely to sell out to Microsoft is that such a move would displease many of Google's customers. "Google has everything that Microsoft wants, great search technology and the ability to sell paid listings alongside this. In addition it is the most popular search site out there. The only disadvantage to (a merger) is the idea that Microsoft's bad reputation might taint a Google brand that remains largely loved."