Just two years ago, Yahoo spent $79 million to rebuff a hostile takeover from Microsoft and preserve its independence. Now, a big part of Yahoo's future prosperity depends on how well it can join arms with Microsoft on a high-risk, high-reward technical project.
Yahoo and Microsoft are racing to meet a fall deadline for launching their joint venture to collaborate on Internet search, an effort by the former rivals to try to narrow the gap with their much stronger, common foe: Google.
The effort -- including the retraining of hundreds of Yahoo salespeople to sell ads for both companies, and a conga line of about 400 engineers who are relocating from Yahoo to Microsoft offices in Silicon Valley; Bangalore,
India; Burbank; and Redmond, Wash. -- needs to be complete by mid-October if the two companies hope to have the show up and running before the start of the holiday season, the critical make-or-break period for advertisers and publishers.
At stake in the joint venture, Yahoo executives say, is the company's ability to become an innovative force in search again -- something Yahoo acknowledges it can no longer afford without its partnership with Microsoft's Bing search engine. The 10-year partnership has Bing providing the underlying results of Yahoo searches, with Yahoo retaining control of how those results are displayed.