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Microsoft Secretly After Yahoo's Display Business

Kara Swisher thinks Microsoft is simply biding its time floating half-hearted proposals such as the one last week that would have seen the software giant acquire Yahoo's search business while instating Carl Icahn as chief of the leftovers. Why, because Microsoft knows that it needs more than Yahoo's search business to effectively compete with Google. Indeed, "it's also Yahoo's strong display advertising business that Microsoft is clearly after," Swisher says, citing "numerous sources within the company."

As one says, "This is not just about search. It is about scale in all aspects of a market that is going to be gigantic." In other words, Microsoft is using search to get in the door, where it will then move onto display, an area that many experts think will be far more lucrative in the years to come.

As Swisher reminds us, search still rules online advertising, but the market will also settle faster than display, which has far more room to grow. Yahoo is still king of this market, which accounts for 34% of online spending. This, she says, could be the real prize Microsoft is after.

Read the whole story at D: All Things Digital »

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