News Corp’s Wall Street Journal reported today that Microsoft (MS) has approached News Corp and Time Warner to revive talks about a Yahoo acquisition that would leave MS with the search business and either News Corp’s MySpace or Time Warner’s AOL with the rest.
Yahoo shares, which yesterday had fallen to their lowest value ($20.20) since their rapid climb to a high of $29.98 after MS first offered to buy the company last February, rose to $21.49 today.
Also today, the Washington Post confirmed that the US Justice Department has opened a formal antitrust investigation into last month’s deal between Google and Yahoo. The deal was always conditional on Justice Department consent, and the investigation will delay implementation.
Search technology developments
Meanwhile, the principal players are not letting the tech grass grow under their feet in the race for market share. On Monday, market leader Google announced a breakthrough on indexing Flash sites, while on Tuesday MS confirmed it has acquired semantic start-up Powerset and will integrate its natural language search features into Live Search.
Powerset will be “working with our existing search team [in San Francisco] and other MS teams,” said the MS press release. “We’re looking to add even more talented engineers to the San Francisco team to accelerate our shared progress. If you're interested in joining the team, drop us a line.”
So, the bottom line is that MS has not given up on buying a chunk of the search market through a Yahoo acquisition, but is hoping that a breakthrough in natural language search will enable it to take leadership away from Google’s fabled algorithms, something Live Search has notably failed to do so far.