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Will Google Replace MSFT as Yahoo’s Search Provider?

CEO Eric Schmidt says Google wants to work with Yahoo


At an event in Tokyo to debut its new Nexus tablet computer to the Japanese market, Google (NASDAQ:GOOG) CEO Eric Schmidt said that the Internet search giant wanted to partner with Yahoo (NASDAQ:YHOO) to support its web search functions.

Currently, Microsoft‘s (NASDAQ:MSFT) Bing search engine drives Yahoo’s web searches. According to Schmidt, Google has approached Yahoo several times to discuss replacing Microsoft, Forbes noted.

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Yahoo’s search engine deal with Microsoft goes back to 2009. Under the terms of that arrangement, Yahoo can ditch Microsoft as soon as next year.

With new Yahoo CEO Marissa Mayer looking for new strategies to revive Yahoo’s fortunes, the time might be ripe to consider a new search engine partnership.

Most analysts do not consider the Microsoft-Yahoo search engine deal a successful relationship for Yahoo, but warn that government regulators might block a similar deal with Google on anti-trust concerns.

However, Schmidt’s comments about a possible deal suggest that regulatory hurdles may not be a high as they were previously.

In Wednesday mid-day trading, Google shares rose fractionally, while Yahoo was mostly flat and Microsoft fell about 1%.

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