DealZone

Yahoo tests Google’s waters, Microsoft’s temper

April 9, 2008

yahoo.jpgThere’s something about deadlines that sharpens the mind. Reporters know this and Yahoo is finding out with its decision to get into a Web search advertising test with arch-rival search firm Google Inc.

Yahoo is facing a three-week deadline to sit down with Microsoft, which has offered $42 billion to buy the company, and seems to be getting ever more creative in figuring out ways to resist the advances of its suitor to the North. The length of its limited test with Google? Two weeks.

Google, of course, isn’t about to object. “A long-term deal could be the only option that allows Yahoo to remain an independent company,” a person close to Google told us.

So why would Yahoo start hooking up with Google? Flaunting its flirtation with the enemy could put pressure on Microsoft to raise the bid. After all, if the test results show a spike in advertising revenue, that could mean Yahoo is worth more to a buyer if it starts outsourcing full time. That could lead to lightening Microsoft’s wallet more than the software giant had first anticipated.

But Yahoo plays a dangerous game. Microsoft said a deal between Yahoo and Microsoft could make the Web search market less competitive, just the kind of thing that leads to politicians calling for hearings. And as Microsoft knows, trips to Washington are never fun.

Comments
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My feelings are, Google has about 80% of the market at this time. That is more and a magority in my mind, and close to a manopolie. While Microsoft has only 5-10% of the market share. I see nothing wrong with compition coming from a new owner that has that ability, and by so doing we will see advertising price’s come down. This is a win win for both the owners of the business, and we the consumer. Microsoft has my vote in there deal to buy the company, and at a fare price. I personaly feel the price they are offering is too much, back off a bit and I believe Yahoo will sell. No ne else wants to buy other than perhaps Google, and the Fed’s will not allow that.

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