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Facebook and Yahoo! - is some kind of merger on the cards?

  • 20 November 2012
  • Written by 
  • Published in Deals

Rumours of secret meetings between Mayer and Sandberg leave us wondering if there's something major about to happen.

With so many CEOs in so short a time, the young and fresh Marissa Mayer brought something new to Yahoo! When she joined in July this year we saw a major move away from the somewhat staid technocrat theme of CEOs-gone.

Similarly, when Sheryl Sandberg joined Facebook, she also brought a calming influence to the testosterone-filled early days of that company.

So here we have one company on the way up (with an unexpected pause in growth following its IPO) another on the way down (also with an unexpected pause in the form of its new CEO).

Both companies probably have a few hard decisions to make in the near future.

Over the weekend, reports surfaced of a budding alliance between the two companies brought about by secret meetings between the two ladies.

Initial speculation has centred around embedding Yahoo!'s search engine into Facebook, after-all, it was just two months ago that Facebook's CEO Mark Zuckerberg noted when interviewed at TechCrunch Disrupt, "We do on the order of a billion searches per day, and we're not even trying. Most is for people but some are doing brand searches. There's a big opportunity there."

"Search engines are evolving to giving you a set of answers," Zuckerberg also said. "Facebook is pretty uniquely positioned to answer a lot of questions people have" what sushi restaurant friends like "These are queries you could potentially do on Facebook if we built it out. At some point we'll do it… we have a team working on search"

It would seem that Sandberg might be trying to short-circuit that internal development process by bringing in a completed tried-and-true search engine which could probably be adapted to the special needs of Facebook users rather easily.

But what if there was more to it than that?

iTWire has reported on more than one occasion of various alliances between the two companies; that have generally amounted to little.

However, with such a CxO level 'meeting of the minds' there may be more coming. After all, if Yahoo! was to abandon its racist, homophobic, toxic almost completely un-moderated chat environment, there is very little in its current product line which would compete with Facebook - a combined entity would strengthen both parties - after-all, there can be very few Yahoo! Users who are not already on Facebook.

Overnight, Yahoo's stock was up nearly 3% on better than expected revenue and perhaps news of the weekend's tête-à-tête. Even so, Yahoo!'s market cap of $US21.71B wouldn't be a huge stretch for Facebook which is currently valued a little over double that figure at $US49.65B

Best of all, their head offices in Sunnyvale and Palo Alto are only about 10km apart.

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