Apple Inc. (NASDAQ:AAPL) and Yahoo! Inc. (NASDAQ:YHOO) are negotiating to deepen their relationship, according to a report from the Wall Street Journal citing sources familiar with the situation.
Both companies are exploring the possibility of expanding the integration of Yahoo! Inc. (NASDAQ:YHOO)’s services into the iPhone and iPad devices of Apple Inc. (NASDAQ:AAPL). Some of the services of Yahoo were already integrated on the iPhone’s such as the weather and Yahoo Finance site as well as its sports statistics, which helps power Siri- the voice activated assistant of Apple Inc. (NASDAQ:AAPL).
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According to the people familiar with the discussions of the two tech companies, Apple Inc. (NASDAQ:AAPL) and Yahoo! Inc. (NASDAQ:YHOO) are exploring a new expanded Siri partnership, which allows the integration of more content from Yahoo News and other web services to the iPhone’s and iPad’s. However, they said the two companies does not have any impending agreement yet.
Yahoo! Inc. (NASDAQ:YHOO) has an existing search partnership with Microsoft Corporation (NASDAQ:MSFT) while Apple Inc. (NASDAQ:AAPL) has an agreement with Google Inc (NASDAQ:GOOG) to use its search service as the default web browser for the iPhone and iPad.
Apple and Yahoo! managed to create an agreement without affecting their existing agreements with Google and Microsoft, respectively through the Siri partnership. Apple updated Siri by adding data from Yahoo. Users speak to their phones using Apple’s voice activated assistant to get information.
Analysts believed that a deeper partnership between the two companies will boost Apple Inc. (NASDAQ:AAPL)’s sales for the iPhone and iPad’s by more than 200 million this year. On the other hand, it would also help Yahoo! Inc. (NASDAQ:YHOO) achieve its objective in expanding its web presence and transform it into a major mobile software and also would help the search company increase its web traffic, which is currently going downhill.
According to the people familiar with the issue, there are obstacles in the negation. Although the possibility of a deeper partnership is viewed to be beneficial for both companies, some executives within Apple Inc. (NASDAQ:AAPL) particularly Eddy Cue, senior vice president of internet software and services is not willing to sacrifice the quality of search results in the company’s mobile devices.
Google’s search remains the best choice for the iPhone and iPad. In the case of Yahoo, the company signed a 10-year partnership with Microsoft Corporation (NASDAQ:MSFT).