So it hit the news today that Yahoo is considering a strategic alliance with AOL in order to keep the wolf from the door, following Microsoft’s much-publicised takeover bid. At the same time, Yahoo is considering channeling the lucrative advertising system of its competitor Google (itself a shareholder in AOL) in an effort to generate revenues.

Michael Holland of New York Investment fund Holland & Co. said, rather uncharitably, “The AOL-Yahoo thing reminds me of two men drowning, both grabbing on to each other”. [Guardian 11.04.08, p26]. The consensus over Yahoo seems to be that these are the acts of a company in dire straits.

More interesting, I thought, and more broadly relevant to the search space, was the story that hit the press on Monday (07.11.08). A European Commission advisory body has issued a warning to search engines concerning the lengthy periods for which they retain users data. By analysing the websites you visit, search engines can build up a staggeringly comprehensive picture of our likes, dislikes and personality types. Yahoo is one of the better search engines in this regard, retaining its users’ data for only 13 months, compared to Google’s 18. However, whether used for marketing purposes, or purely for internal development, I suspect most people remain unaware that their data is used in this way.

Without naming any names, one of the elements of PR work we do is in the open source enterprise search space. One of the things such companies are understandably passionate about is the transparency of their software: anyone can see how they work and what they’re doing. Yahoo, Google and MSN search are ‘closed books’ to the outside world in terms of their intellectual property. Many would argue that we can only know as much about a search engine’s privacy policies as they are willing, or are forced, to tell us.

These high-profile data-gathering systems, facebook included, are a cause of mounting concern amongst net users. Following the recent PR disaster connected to the ‘Phorm’ advertising system, which was decreed to gather user information in a way that was genuinely illegal, you’d think that Yahoo would manage its PR extremely carefully regarding their ‘experiment’ with the Google advertising system. But with all eyes on the share price, Yahoo are, I suspect, keen to play down this partnership. Perhaps it’s time these companies threw open the doors to show, if only to a regulatory body, exactly how their market-information software works.