Microsoft(MSFT Quote - Cramer on MSFT - Stock Picks), with its own lack of traction in the Web business, continues to see some value in Yahoo!, given the fact that it wanted to acquire Yahoo! outright and is now in talks to work out an alternative deal with the company.
But Yahoo! also agreed in April to outsource some of its online ads to Google in a two-week test, raising questions as to whether this meant Yahoo! had misgivings about its own platform. Yahoo! remains in discussions with Google to come up with a more substantial arrangement for its ads. But ever since merger talks with Microsoft collapsed on May 3, there hasn't been as much attention paid toward it, at least not publicly. That may be because Yahoo! had only dangled a potential deal with Google as a way to make Microsoft back off, which it ultimately did. But now even billionaire investor Carl Icahn, who is trying to oust Yahoo!'s board, is entertaining the idea of a partnership with Google in the event that he can't resuscitate a merger with Microsoft. David Pann, vice president of advertising at Yahoo!, says the company is committed to being a principal in search. "Yahoo!'s Panama continues to make good gains, improving search relevance, click-through rates, and the advertiser-user experience," he said in a statement. "We have been working hard to enhance our paid search platform, capabilities and performance including making improvements to our targeting and matching capabilities."


