Yahoo to Strike Deal with AOL Outsource ads to Google, Microsoft it Talks with NewsCorp For a Joint Bid
Yahoo – potential deal with AOL, outsourced ads to Google.
Yahoo Inc. and Time Warner Inc.’s AOL are closing in on a deal to combine their Internet operations, a move aimed at thwarting Microsoft Corp.’s effort to acquire Yahoo, people familiar with the matter said Wednesday. – WSJ
“Yahoo has confirmed a Wall Street Journal report that it will be testing Google’s paid search ads alongside its own for the next two weeks and involving no more than 3 percent of Yahoo’s search pages in the United States. From the Yahoo statement” – Search Engine Land
“But Microsoft is recrafting its assault plan by talking with Rupert Murdoch’s News Corp., publisher of The Wall Street Journal, about mounting a joint bid for Yahoo, people familiar with the matter said.” – WSJ
Scaring Microsoft Into Raising its Bid?
Earlier Yahoo said it is not against Microsoft takeover, just give them a sweeter deal. Microsoft said the offer stays in tact and Yahoo has 3 weeks before in enters into proxy fight, lowering the bid.
Could late developments be a masquerade by Yahoo to get a sweeter deal? It seems logical.
- MS needs Yahoo strategically. Yahoo knows this. MS will have no shot at search if they let Yahoo pass.
- No one beat Microsoft in per share value if the deal goes through, making Yahoo board happy.
- Google will own 90% of advertising market if the deal strikes – MS’s nightmare scenario
Microsoft quickly played the antitrust card on the Google-Yahoo ad partnership, but Search Engine Land notes that Overture controlled 90% of search ad market in the past, when Google was a small player.
Wallstreet states: “many analysts and investors believe Microsoft will ultimately win out.â€
It is logical for Yahoo to take steps and show Microsoft they can successfully fend off the deal, leaving them with no search share. Microsoft failed at search, everyone agrees, but lets look back at what Steve Balmer said:
“I’m going to fu***** bury that guy(Eric Schmidt), I have done it before, and I will do it again. I’m going to fu***** kill Google.” – on the departure of Microsoft engineer to Google.
“So it may be my last breath at Microsoft, but we’re going to be there, working away, building share.” – MIX08 online technology conference
For Microsoft Yahoo is the only opportunity to effectively gain search market share. Balmer won’t let it slip. I believe that Microsoft will be forced to raise the bid and that Jerry is simply playing very smart. He’s got most of the aces and kings and it’s a matter of keeping empire in tact for Microsoft.
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