Facebook and Yahoo: Deal or No Deal?

Facebook (NASDAQ:FB) and Yahoo (NASDAQ:YHOO) are largely in the same position. At one time both stocks were Wall Street darlings, but now investors wonder what catalysts will move the stocks forward in the future.

Over the weekend reports surfaced that the two tech giants were considering a search alliance. Then, merely hours later, AlThingsD reported their sources scoffed at the idea of such a deal:

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“In addition, Yahoo is not anywhere near ending its search partnership with Microsoft (NASDAQ:MSFT), although new CEO Marissa Mayer has been in touch with the software giant about improving performance that has been less than lackluster over the course of its history so far.”

Although this chatter is nothing more than pre-holiday rumors for traders, I’d be surprised if Marissa Mayer and Facebook CEO Mark Zuckerberg weren’t planning a way to combine forces for their mutual benefit. Here’s why: