Microsoft-Yahoo: Google ‘hearts’ Yahoo’s search ads

May 9, 2008

schmidt.jpgAs the Microsoft-Yahoo will-they-won’t-they? saga drags on, Google’s role in any future talks becomes more apparent.

On Thursday Google CEO Eric Schmidt said a two-week trial selling search advertisements on rival Yahoo last month had given the companies good reason to discuss cooperation, but there was no deal yet.

That isn’t great news for some in the online advertising world.  As commentators have pointed out, a Google-Yahoo partnership (Yahoogle? Yoogle? Gahoo?) could concentrate too much power with just one team. This has led to some folk to paint Microsoft as the little guy. Yes, the same Microsoft, which is a Monopoly 101 case study for first-year economics college students.

In a TV interview with CNBC on Friday, WPP CEO Martin Sorrell said, “It was a shame…that those negotiations failed. Maybe they’ll come back again.”

Sorrell, whose empire of ad agencies includes Ogilvy, JWT and Y&R,  said the advertising industry lost a potential balancing influence in the Web search market when the talks between Microsoft and Yahoo collapsed.

Meanwhile,  Silicon Alley Insider reports that Google is seriously considering having display ads on its home page, based on statements from executives. SAI estimates Google could add up to $3 billion to $4 billion in annual revenue if it decided to do so.

 Keep an eye on:

* British video search engine company Blinkx sees it shares fly on rumors of a possible bid by News Corp or Google  (Reuters)

* MySpace lets users share their profiles across the Web (Reuters)

* Real Networks spins off its gaming division (GigaOM)

(Photo: Reuters)

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