Yahoo! has told the US Securities and Exchange Commission that it needs more time to hammer out its search deal with one-time rival Microsoft.

The SEC filing reads:

The Letter Agreement specified that the parties would execute Definitive Agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized. The parties are working diligently on finalizing the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible.

No details are given as to the cause of the delay, but it is a feasible assumption that the two parties are working overtime to avoid possible regulatory scrutiny.

It’s no secret that Yahoo! has had one hell of a year. The company was criticized for having no direction, previous CEO Jerry Yang was canned, and negotiations with Microsoft were all over the map. Eventually Carol Bartz was hired. She wasted no time and quickly declared a new direction, patching things up with the boys in Redmond, cutting fat, shutting down services, and pissing off users.

One of those services that didn’t make the cut is our old pal, GeoCities. They will be closing their doors forever on October 26. They were purchased in 1999 for a massive $3.65 billion.

We long for the days when one could sign onto GeoCities, Angelfire, Tripod, or even Homestead. Life just seemed much simpler then. Those were the days when tables were king. Blink and marquee tags were displayed with pride. Being in a “web ring” meant you were legit.

Admit it. You had a GeoCities account–but you couldn’t remember it because the URL they assigned you was something only Rainman could remember. Dare we say they were a piece of Internet culture and history?

A malware network has been discovered siphoning profits from Google, Yahoo, and Bing by spoofing the search engines and their DNS addresses.

Dubbed the “Bahama Botnet,” it hijacks search engine results with doctored links that run a user through a chain of sponsored ad sites. After clicking his or her way through the ads, the user eventually ends up on the requested page.

A traceroute of the connection shows that although the DNS name of the server appears to be legitimate, users are actually connected to 64.86.17.56, an unknown IP address in Canada.

It will be interesting to see how the major search engine corporations respond to this threat.

Update: 29 July, 2009 @ 10:12 AM

Yahoo! and Microsoft have published simultaneous press releases which confirm that a deal between the one time rivals has been finalized.

A full list of the deal’s points are contained in the press releases, but we’ve boiled that list down into a selection of essentials:

• Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing Web search platforms.
• Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites.
• Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform.
• Each company will maintain its own separate display advertising business and sales force.
• Yahoo! will innovate and “own” the user experience on Yahoo! properties even though it will be powered by Microsoft technology.
• Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites.
• Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.

Original story: 29 July, 2009 @ 1:28 AM
A source close to the renewed negotiations between Microsoft Corp. and Yahoo! Inc. has confirmed that the dot com giants have struck an agreement that will be announced within 24 hours.

The terms of the alleged agreement upholds rumors of a revenue sharing model, while dashing gossip that Microsoft would foot an up-front payment of some $3 billion said the source, who wished to remain anonymous as the deal has not been announced.

Rumors of a renewed effort to unite Yahoo! and Microsoft against Google broke two weeks ago Friday when 24/7 Wall Street revealed that sources inside a major client of the investment firm ThinkEquity said that a deal was “imminent.” Secondary sources supported the rumors with reports that key Microsoft search execs were at the Yahoo! campus in Silicon Valley to hash out the “short strokes” of a deal.

With the short strokes apparently drying, the purported deal is also said to ink a Yahoo! switch to Bing search results and the adoption of Microsoft technology for advertising sales.

But as Reuters notes, a combination of the second and third largest search outfits will certainly trigger scrutiny, if not ire from antitrust regulators. Similarly, regulators may gut a key advantage to the deal by restricting Microsoft’s ability to share search data with its business partner — not acquisition — Yahoo! Inc.

Despite the potential for legal wrangling, shareholders have continued to see value in a Microsoft/Yahoo! agreement. ComScore’s June search statistics suggest that the two companies are merely trading blows for their respective shares, rather than growing the business by eroding Google. The stats reveal that Google held steady at 65 percent while a 0.5 percent drop in Yahoo! search coincides with the $100 million introduction of Bing. A deal that unites Yahoo! and Microsoft’s search divisions could do away with the share-exchanging wheel spinning and unite 30% of the market under one roof.

Both companies have predictably declined comment.

It seems fitting that almost one year after we published a detailed account of the dramatic history between Microsoft and Yahoo! that the rival web outfits may finally be close to an actual deal.

News of rekindled romance broke yesterday when 24/7 Wall Street revealed that sources inside a major client of the investment firm ThinkEquity said that a deal was “imminent.”

The alleged imminence of the deal has triggered a new round of speculation over the terms. Sources outside ThinkEquity’s sphere have suggested that Microsoft will deliver $3 billion up front and 110 percent of its net search revenues, declining to 90 percent after the third year.

This most recent endeavor to finally ink an agreement may be more than the incensed phone calls and posturing PR releases of old. Former WSJ business analyst Kara Swisher has reported that key Microsoft search execs are on the ground in Silicon Valley to spend a weekend with their old flame.

One source close to the situation said that the nuptials are “down to the short strokes.” They continued: “it is just a question if we can finally close this.”

Even in today’s tepid economic climate, there continues to be a business case for a Microsoft acquisition of Yahoo! ComScore’s June search statistics suggest that the two companies are trading blows for their respective shares, rather than growing the business by eroding Google. The stats reveal that Big G held steady at 65 percent while a 0.5 percent drop in Yahoo! search coincides with the $100 million introduction of Bing. A deal that unites Yahoo! and Microsoft’s search divisions could do away with the share-exchanging wheel spinning and unite 30% of the market under one roof.

For Yahoo!, Microsoft may simply be an inevitability. Even after ousting Yahoo! founder and Dear Leader Jerry Yang, issuing pink slips to some 1400 employees and raising former Autodesk exec Carol Bartz to the spot of chief exec, the overall outlook of the company has remained grim.

Year to date, a six month uptick in the value of Yahoo! stock seems fortuitous, but the upswing has yet to put the company back at $20 a share– a value that plunged to less than $11 over the span of four weeks between September and October of last year.

ComScore data also reveals that deep purple has lost a share of the search market every month since the start of the year.

Finally, while Google continues to expand the size and scope of its operation and Microsoft has refreshed its face with Bing, Yahoo! has seemed positively paralyzed in comparison. Efforts to enhance the admittedly clever YQL and BOSS initiatives don’t do a lick of good to bolster the company’s primary focus on public search and advertising.

In many ways, both companies are still struggling to recover from burdensome portfolios that became crushing in the wake of the .com bust. After diversifying into personals, automobiles, finance, auctions, shopping, sports, games and chat, the “portal to the web” model seemed quite the anachronism in light of the simplicity and transparency Google has offered users and investors.

You know it, we know it, and Microhoo knows it: Yahoo! and Microsoft are in dire need of a little simplicity, and a fat-trimming search merger would not only help to streamline, but help to instantly realize the market share aspirations neither company can realize alone.

New Yahoo! CEO Carol Bartz once asked bankers and pundits to give the company some “frigging breathing room.” Without this deal, she may as well have asked for gasping room instead.

Stances taken in several recent interviews suggest that Microsoft chief exec Steve Ballmer is remaining soft on his firm’s revamped search engine called “Bing.”

Despite intentions to shovel billions into the search furnace over the next five years, Ballmer has been wary to appear excited, much less exuberant as usual. In an interview conducted by Reuters, the exec demonstrated that he was even a little bearish about Bing’s hype.

“I don’t want to over-set expectations. We are going to have to be tenacious and keep up the pace of innovation over a long period of time,” he said.

“We may be successful, we may not, but we can’t be successful without being committed to changing things, changing the approach, changing the business model and you can’t give up in six months, or a year or two years,” he continued in an AFP interview.

While Bing briefly overtook Yahoo! for the number two spot in search shortly after its launch, Live’s replacement has once again fallen to its regular third place position. During the same period, arch rival Google picked up nearly one percent additional share of the search market.

Where’s that good ol’ Ballmer Rage we’ve come to love?

Yahoo closing GeoCitites, which  it bought for $4 billion  in 1999. Woops. 

Ballmer reiterates interest in Yahoo. Dumbass. (via H)

The perpetual dramastorm at Yahoo! continues with the recent announcement that the firm has selected Carol Bartz of Autodesk as the next CEO.

Though criticisms for having little to no web experience have already been leveld at her, Bartz has been quick to play hardball with pundits. “Let’s not put ourselves in some crazy timeline. Let’s give this company some frigging breathing room. Everybody on the outside deciding what Yahoo should or shouldn’t do–that’s going to stop,” she said during her first financial meeting.

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Yahoo! has quickly jumped to the front of the privacy heap with its recent announcement that search data will be globally anonymized after just 90 days.

The newest maneuver by the flagging web giant is stunningly brisk compared to the 18 month anonymization timetable promised by Microsoft and Google. It is believed that this move is intended to comply with the spirit of recent European regulatory requests to scrub identifying data sooner than it once was.

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As we draw into the blustery month of December, we enter a period of reflection before we move to embrace the coming year. While the new year will be all about righting wrongs and changing our habits, we’ll take this time of giving and considering to look back and snicker at all the firms who booked passage on the failboat in 2008.

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Today T-Mobile announced it will be partnering with Yahoo! to bring mobile search to a most of its phone lineup. The service, called Web2Go, will include Yahoo!’s own one search as well as a customizable home page and a host of other features.