The Yahoo/Microsoft partnership, while the Silicon Valley talk,has employees concerned at Yahoo about more layoffs in the Yahoosearch department. The deal teams of two of thebiggest technology companies against Google for the lucrativecontrol of the internet search market. Analyst believe that, in theshort term, Google would has little to worry about but in the longterm they may depending on how advertisers respond to the idea of alarger #2 in the search advertising market.

Google, currently, has 65% of the market while Yahoo has almost20% and Microsoft at a distant third with less than 10%. Themanaging editor for CRN Magazine considers this absolute steal forMicrosoft in that Yahoo wins the ability to stay an independentcompany with a huge new friend. Reporters say consumers won’tnotice changes right away but the partnership will benefitconsumers over the long run because it doesn’t hurt to have a verystrong #2 in search. With consumers receptive to the move, analystsbelieve that it will boost Bing’s exposure to Yahoo’s audiencegiving Microsoft its desire for a greater share of Internetadvertising. Yahoo is reserving the right to retain control of theuser interface which will control the look and feel of how thesearch results will be presented but the technology is all done byMicrosoft. Analysts predict a tie in to remind people that Bing iswhat’s providing the results which is key to branding forMicrosoft.

Question: What corporate-level cooperative strategies do youthink we can expect between Microsoft and Yahoo? Explain. Provideyour rationale. Choices are diversifying strategic alliance,synergistic strategic alliance, or franchising.