A Reality Check on Facebook and Yahoo! Rumors

 | Nov 19, 2012 | 10:19 AM EST
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On Sunday, the U.K.-based Sunday Telegraph ran a story saying that Facebook (FB) chief operating officer Sheryl Sandberg and Yahoo! (YHOO) CEO Marissa Mayer were in talks about partnering around search, with a goal of helping Facebook better compete against Google (GOOG).

Although I think there is a possibility that the two companies could work together on this in the future, there are several reasons why you shouldn't believe this report.

1. Why would the Sunday Telegraph know that Mayer and Sandberg have been talking? Someone would have had to leak it to the paper -- and this person would have to have been either Sandberg or Mayer. Sandberg doesn't gain anything from leaking that Facebook doesn't know enough to do search themselves. Mayer, for her part, has tried to come down hard on leaks since she arrived at Yahoo. Why would she suddenly start leaking now?

Some have speculated that maybe it was activist investor Dan Loeb or another Yahoo board member. But, again, why? Loeb has been long Yahoo for well over a year. He's never once given a direct interview to CNBC or Bloomberg about his position. He once spoke at an investor conference about his position, making a few brief remarks. That's it. It doesn't sound like a guy itching to leak information.

2. If you were a Yahoo or Facebook insider, why would you leak news to the Sunday Telegraph? If I were Loeb, and I wanted to leak information, I certainly wouldn't think I needed to pick up the phone and dial London. I would call up Michael De La Merced at The New York Times or Evelyn Rusli at The Wall Street Journal.

3. The Sunday Telegraph gets all its scoops wrong. For well over a year now, it's always been the Sunday Telegraph that's run stories speculating that Research In Motion (RIMM) would break itself up, or that we'd see a company like IBM (IBM) buy its enterprise business. All these stories were completely bogus. Why should we start trusting them now?

4. Danny Sullivan is right that Yahoo can't really "help" Facebook with search now, given that most of its talent left the company in 2009 after Yahoo outsourced its back-end search to Microsoft (MSFT), along with the technology. Marissa Mayer has deep experience in search, and Yahoo could certainly build up its expertise in search from scratch, but they're not ready to help Facebook today.

5. Facebook has been talking about search since 2007, yet it has done nothing to get into it, save for floating a few tasty rumors out there to excite the press and investors. Searching for my high school buddy's name in my Facebook search box doesn't make Facebook a search company any more than driving my car to the mechanic for an oil change makes me an expert in car engines.

I think both Facebook and Yahoo should get into search more themselves, but it's premature to say that they're ready to jump into a partnership together.

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