Facebook (Nasdaq: FB), the No. 1 social networking site, quashed market speculation it might forge an alliance with Yahoo (Nasdaq: YHOO), the No. 3 search engine and media site.
The alliance would have been to improve search experience on Facebook, based in Menlo Park, Calif. “We are not in talks” with Yahoo, the company said, although it acknowledged it was trying to improve the search experience for its 1 billion members.
Yahoo, of Sunnyvale, Calif., had no comment. New CEO Marissa Mayer, in place only since July, has been looking at new ways to boost revenue and eyeballs.
Facebook CEO Mark Zuckerberg has said that by deepening search capabilities on his site, members would stay there more and obtain more information. Earlier this year, Facebook acquired 650 patents from Microsoft Corp. (Nasdaq: MSFT) for $550 million, many involving search, which Microsoft had just bought from AOL (NYSE: AOL), the No. 5 website.
Many of those patents related to search and were part of the original Netscape Communications, the Web browser pioneer ultimately acquired by AOL. Facebook also gave Microsoft license rights to many of the patents.
Microsoft, which runs its Bing search engine, already handles many mechanical functions for Yahoo, under terms of a deal forged in 2009.
Shares of Facebook fell 58 cents to $22.98 in late Monday trading, while those of Yahoo rose 43 cents to $18.29.