Microsoft May Get Out of the Advertising Business by 2010, Say Cowen Analysts

Noting that Microsoft’s online business efforts are struggling, Cownes analysts Kevin Kopelman and Jim Friedland project that, without the purchase of Yahoo, Microsoft will be out of the online ad business in 2 years. Microsoft’s online service business units have shown a $480M loss and — barring a Yahoo buyout to help bolster its position — the duo suggest that MS bail on its faltering efforts.  But Microsoft is not a company that walks away from a fight without first taking a real swing, and this report will only fuel a push for renewed MS/Yahoo talks. The recommendation must leave Yang smiling, Icahn fuming and Schmidt laughing.