According to my sources Facebook and Yahoo are in talks to teamp-up on search. Here's the catch, Microsoft will play a big part in those talks. Microsoft will give up Bing and approximately 400 engineers to Yahoo for shares in Yahoo and Facebook clearing the path for a Yahoo/Facebook search engine.
From The Wall Street Cheat Sheet:
I’d be surprised if Marissa Mayer and Facebook CEO Mark Zuckerberg weren’t planning a way to combine forces for their mutual benefit. Here’s why:
1. Both CEOs have stated “mobile” is a top near-term objective;
2. Both CEOs are heavily focused on improving user engagement with improved technology;
3. Both companies need each other to take significant marketshare from Google (NASDAQ:GOOG);
4 .Both companies have deals with Microsoft, so that reduces hurdles for certain deals; and,
5. Both companies have different spheres of expertise which could nicely compliment the others’.
Lastly, and most importantly, a sexy blockbuster partnership between Facebook and Yahoo will create positive hype for both stocks — something desperately needed given the pain long term shareholders have felt.
Although the current search alliance may be pure speculation, don’t rule out an exciting announcement sooner than later.