Microsoft and Yahoo stop talking, and Google wins

Microsoft and Yahoo stop talking, and Google wins

Summary: Today Microsoft and Yahoo officially stopped talking -- the day, I'm sure, Yahoo investors were dreading. The hope that Microsoft and Yahoo might still work out a deal fizzled, and as result, Yahoo shares plummeted 10% before trading ended today.


Today Microsoft and Yahoo officially stopped talking -- the day, I'm sure, Yahoo investors were dreading. The hope that Microsoft and Yahoo might still work out a deal fizzled, and as result, Yahoo shares plummeted 10% before trading ended today.

today announced that discussions with Microsoft regarding a potential transaction -- whether for an acquisition of all of Yahoo! or a partial acquisition -- have concluded. The conclusion of discussions follows numerous meetings and conversations with Microsoft regarding a number of transaction alternatives, including a meeting between Yahoo! and Microsoft on June 8th in which Chairman Roy Bostock and other independent Board members from Yahoo! participated. At that meeting, Microsoft representatives stated unequivocally that Microsoft is not interested in pursuing an acquisition of all of Yahoo!, even at the price range it had previously suggested.

It worked out well for Google though -- no Microsoft/Yahoo merger on the horizon, and a fresh partnership that lets them put ads directly onto Yahoo properties. Jackpot! They are careful to point out why this deal is good, and not evil on their blog:

  • This is not a merger. Rather, we are merely providing access to our advertising technology to Yahoo! through our AdSense program.
  • This does not remove a competitor from the playing field. Yahoo! will remain in the business of search and content advertising, which gives the company a continued incentive to keep improving and innovating. Even during this agreement, Yahoo! can use our technology as much or as little as it chooses.
  • This does not prevent Yahoo! from making similar arrangements with others. This arrangement is not exclusive, meaning that Yahoo! could enter into similar arrangements with other companies.
  • This does not increase Google's share of search traffic. Yahoo! will continue to run its own search engine and advertising programs, and the agreement will not increase Google's share of search traffic.
  • This does not let Google raise prices for advertisers. Google does not set the prices manually for ads; rather, advertisers themselves determine prices through an ongoing competitive auction. We have found over years of research that an auction is by far the most efficient way to price search advertising and have no intention of changing that.

Here are some excerpts from the announcements made by Google and Yahoo:

"[Google] has reached an agreement that gives Yahoo! the ability to use Google's search and contextual advertising technology through its AdSense(TM) for Search and AdSense for Content advertising programs. Under the agreement, Yahoo! has the option to display Google ads alongside its own natural search results in the U.S. and Canada. In addition, Yahoo! can serve contextually targeted ads on its U.S. and Canadian web properties as well as on its current publisher partner sites." -- Google

"Yahoo! believes that this agreement will enable the Company to better monetize Yahoo!'s search inventory in the United States and Canada. At current monetization rates, this is an approximately $800 million annual revenue opportunity. In the first 12 months following implementation, Yahoo! expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow." -- Yahoo

Topics: Google, Microsoft, Social Enterprise

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  • Just where is NoAxe. He guaranteed that MS was buying Yahoo, and there was

    nothing that Linux Zealots could do about it.
    • He's working out how to spin it along with Ye and LoveCrock

      so that it's not that desperate show off megalomaniac Microsoft fails in throwing their dumb consumers money around to destroy progress and competition, it's "Microsoft intelligently keeps it's capital to 'help' technology firms."
  • Good for Microsoft

    Thank God Microsoft didn't cave to yahoo's sillyness. Gimme a break. $34/share? Yahoo is slowly returning to its true the upper teens. If you own Yahoo stock...ouch.
    • MS is desperate

      Wonder which tech firms them and Icahn will destroy instead.
      • Desparate?

        Yeah, I agree. MS's income 16 Billion, Google and Yahoo's combined is 6 Billion.

        Yeah, I see the desparation. Wish I was as desparate as MS...
        • Well, they need to "continue to add shareholder value" ....

          at levels which were artificially high through :

          1) Illegal anti-competitive pre-installs of the "OS's" at POS.
          Vendors are now offering Linux machines, and it's just the beginning ...

          2) Illegal anti-competitive embrace and extend software strategies for lock-in.
          Open Office, Linux desktop maturity etc ...

          3) Closed source, unresponsive, only capable of trash like Vista.
          Marketing != Good software

          I could go on, but remember folks, when the first few shareholders sell their MS shares, a lot more will follow quickly ....

          They are desperate. Or, do you think they just though "I know, lets make an an offer we don't think Yahoo can refuse ..." <-- Err, why do they need Yahoo? Think now .... I'm waiting ....

          Ha ha ha ;-)
      • desperate? L.O.L. you must live in a nether world fr0thy2

        desperate? L.O.L. you must live in a nether world fr0thy2
        SO.CAL Guy
  • RE: Microsoft and Yahoo stop talking, and Google wins

    Microsoft should forget the Internet and Web and go back to fixing bugs in Vista, Microsoft Office.
    • That goes against their strategy

      of taking over the internet with an army of mouse wielding monkeys so that everyone thinks that the alphaware junk that they illegally force upon the world is all that computing can be.

      They can't fix the bugs. All the time and money in the world and all they can come up with is Vista.

      They can't even do search.

      By bye Monopolysoft. Muhahahahaha .....
    • That's right, the Internet is just a fad....

  • Well

    The good news is that Microsoft will be forced to do what they should have done to begin with, spend billions on search and development of much better search technology.
    The bad news is that Google is getting more and more powerful and is more and more close to becoming a monopoly for both search and advertisement.
    And last but not least Ballmer must go for the health of Microsoft as he has no vision and will significantly hurt Microsoft profits quite soon or late.
    • Without FOSS and Google, the Internet would be a waste of time

      as Monopolysoft would turn it into a barren land of junkware.
  • Balmer ain't goin' no where any time soon.

    It would be a good thing for MSFT but I don't see it
    happening for a few years.
  • When the economy turns sour

    Kinda like it has been lately..... people start looking around at what is going on.

    Each time they see one of Microsoft's incontrovertible, unscrupulous, underhanded, undeniably unethical capers, their knowledge is increased, and their gullible diminished.

    With knowledge comes freedom.
    Ole Man
    • gullible = gullibility

      Ole Man
  • Feeding the Competitor that Unseated You

    This is certainly an interesting conclusion (mile marker?) to a big story. Once upon a time, THE search engine you had to be on, and THE place that was the epitome of search was ... Yahoo! Google wasn't even around (in the public consciousness, at least), and if you weren't on Yahoo!, you lost most of your opportunities (relative, not absolute). Actually, it was less than 10 years ago.

    You'd think they'd hate Google for reducing them from leader to also-ran. Instead, they hate Microsoft so thoroughly, they'd rather further establish the ones who took away their #1 spot. Very interesting, indeed.