The rivalry between Microsoft and Google is nothing new and it looks like a never ending battle between the two Goliaths. Google has been giving Microsoft a run for its money, with its innovative ad market and an extensive search resource.

The First Step:

Microsoft, in its effort to outrun Google had earlier tried to acquire a potential ally - Yahoo! Inc., but Yahoo! wasn’t ready to sell all of its stocks to the software giant. This turned out to be a big blow for Microsoft.

The Latest Rumor:

Rumors stating that Microsoft is negotiating with Yahoo! to acquire Yahoo! Search and Facebook (Surprise surprise!!!), is spreading like wildfire. This deal would be to compete against Google’s far superior Search engine and its ad network.

Microsoft’s intentions:

Yahoo! Inc. has made it clear that it is open to transactions that will benefit its stockholders. This validates the rumor to a considerable extent. One might wonder what good it will do to acquire Yahoo! search and Facebook, but a closer look into the subject would reveal that Microsoft is trying to build a formidable weapon against Google.

Experts say that Yahoo! search, if acquired, would increase Microsoft’s market shares in online advertising. Since Facebook has decided to lock out Google from its platform, this acquisition would mean ‘Advantage Microsoft’.

Strategies involved:

Microsoft and Google have taken an interesting stand on their strategic developments. Initially, Microsoft was an open platform and Google, a closed one.

This is where the turn of events come into play. If Microsoft succeeds in this acquisition they will close down its platform to lock out Google from their terrain.

While Microsoft is rigorously planning the assault, Google has already unleashed its frontline attack - opening up its ad-network to third parties.

The Outcome:

Though Microsoft Officials are confident that their profits will sky-rocket by closing its platform to third parties, the experts believe otherwise. Google with an open platform is bound to reap profits because it creates value for everyone using it. Google has, in a sense, consolidated its victory before Microsoft could even launch its attack.