Yahoo/Microsoft Deal Dead, Yahoo Enters Ad Deal With Google

**UPDATE**
Reuters reports on the deal reached between Google and Yahoo:

Yahoo Inc and Microsoft Corp ended talks as the Web pioneer agreed to let archrival Google Inc sell search ads on its site, the companies said on Thursday.

Yahoo said it had agreed to let Google put search ads on its site in what it called an $800 million annual revenue opportunity that would boost cash flow by $250 million to $450 million in the first 12 months.

The battle for Yahoo! may have an end in sight.

Yahoo! and Google scheduled a joint announcement for just after market close today in which they were expected to announce an advertising pact, according to the New York Times:

Yahoo's board met to evaluate the Microsoft proposal on Tuesday and voted against the deal in favor of moving forward with Google.

The deal would involve Yahoo! outsourcing its advertising business to the more profitable Google system, according to the Wall Street Journal. When Google and Yahoo! explored a similar deal recently, Microsoft raised antitrust issues, claiming that the two search giants would "consolidate over 90 percent of the search advertising markets in Google's hands."

Earlier in the day, Microsoft -- or Yahoo! -- spiked talks they had been holding over a potential deal for Yahoo's search business:

With respect to an acquisition of Yahoo!'s search business alone that Microsoft had proposed, Yahoo!'s Board of Directors has determined, after careful evaluation, that such a transaction would not be consistent with the company's view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo! stockholders.

Additionally, according to Reuters, Yahoo asked if Microsoft would still buy the entire company for $33 a share. Microsoft declined.

News of the deal's death sent Yahoo! shares plummeting 10 percent to $24 a share.

While many news outlets reported that talks between Microsoft and Yahoo! were totally dead, CNBC's Jim Goldman reported that Microsoft sources told him that they were still open to some kind of deal.

Comments

[obamagramma]

Yahoogle ! Yippee !

[monty]

Yahoo/Yang's stupidity began about 8 years ago when the once-powerful Yahoo starting charging fairly high fees for businesses to get listed in their directory, something that was previously free, right around the time Google was fast gaining popularity and attention. As a result, Yahoo killed their core usefulness as an Internet directory, which is why they had to develop all those other services, many of which they gave away for free anyway.

If they had focussed on being the Internet's most popular search engine, they could have avoided becoming obsolete as they've now become.

[jonmonbuckeye]

OK, is it just me or does the Yahoo! CEO look like the dude from American Idol?

[dadw5boys]

Micro soft will be there in the shadows Jerry watch out they don't ambush Yahoo.

[michelv]

You are all missing the background story here. The Google and Yahoo folks are Stanford folks. Also, while they are called dropouts, they really are not. They do have college degrees, and some of them have even graduate degrees, but they just haven't finished all the requirements for their terminal degrees.

In complete contrast, Gates went to Haaavad, not exactly known for its CS/EE program back in the the days (not sure what Gates majored in, though). Gates has no college degree. He is a true dropout. He was just a poorly educated petty programmer who lucked out on IBM's stupidity. Ballmer did finish his degree, but academically he has never amounted to anything. Gates and Ballmer are just businessmen of the worst kind. They are vultures who rule by the stick, who screw up everything they touch, and who stifle innovation. Ask anyone who has worked at Micro$oft. People are abrasive and rude there, and they just yell and scream all the time.

Clearly, from a cultural point of view Google/Yahoo and MS are complete opposites. Microsoft would have been the fungus that killed a flower.

[zephyrus]

Speaking of business....why do you suppose Yahoo asked MS to "revive" their $33/share bid? As I see it, MS figured they'd either acquire a competitor or force them into the arms of Google with their initial bid. No, something stinks here, and as the old saying goes, "the fish stinks from the head down." MS is a crafty bunch (sounds like you have some firsthand experience with them too). Jerry is in trouble and the counteroffer is very telling. The wolves are through the gate, or will be very shortly. My hope is that the new partnership that Yahoo and Google have announced doesn't get the attention of the SEC and anti-trust folks. Otherwise, MS is going to raise all kinds of Hell at the next share holder's meeting and end up acquiring Yahoo on the cheap.

[michelv]

>> As I see it, MS figured they'd either acquire a competitor or force them into
>> the arms of Google with their initial bid. No, something stinks here, and as
>> the old saying goes, "the fish stinks from the head down." MS is a crafty bunch ...

You may very well be right. Historically, that is how MS has been able to compete: by strong arming, destroying, or just acquiring competitors. Their entire energy is focused on the business end of things, not the tech side.

[whatsmyname]

excellent post michelv...­..........­......

[DRaymond]

Stupidity repeats itself. There was a time when Yahoo was the king of the search portals. Then Google showed that it had a nice search algorithm and content spider so Yahoo let Google do all the searching for Yahoo. By the time Yahoo could drop the deal and re-develop its own search system it was way behind the now-monster. The end verdict on this deal down the road will certainly be:

"Google drinks Yahoo's milkshake...again"

[flabingo]

Yang will spend a lot of money dealing with stockholder lawsuits. And they will win

[flabingo]

stupid is forever. Yang , look in the mirror.

[whatsmyname]

You are sooo correct, now if Yang, would admit to his ego-addict­ion.......­........

[Ray46]

If Google was smart they would buy Microsoft with cash and junk bonds, split Microsoft into an operating system company and a software and games company and sell the 2 new companies seperately for a huge profit.

By splitting Microsoft this way I firmly believe the two new companies would be worth much more and be more responsive to its customers needs than the singe company is.

[bikerdude]

I don't care how they do it, I just want to see better OS products than Vista and something that would resemble adequate customer support. It seems like they don't want to be bothered by such mundane matters.

[metropixie]

Ever heard of Apple, or noticed their TV ads? Their UNIX-based OS X runs rings around that Windows shell bolted onto MS-DOS the masses seem to mistake for an OS...

[jalapeno]

Greed pure and simple.....

[carlgt1]

it amazes me the amount of money & hype & arrogance over what's basically about as "brilliant" and ethical as the old rock 'n roll payola advertising scandals (i.e. pay us a lot of money and we'll promote your song/move your company up the search list).

it's not like these hordes of overpaid twits did anything useful for society...

[stateMachine]

Yeah, it's not like I ever use search engines, I just go to my echo chamber of choice for reliably biased information.

[ZenCrusader]

WHY is HuffPo silent on China hacking into Pentagon and congressional computers ? ? ? Could this be more evidence that the left is naive and unable or unwilling to protect US interests ? ? ?

[tunod]

They reported on it last night. Learn to read.

[buddhistMonkey]

{ Pssst, I'll let you in on a little secret: it's even worse than you think. It turns out that Arianna herself is Chinese, and all of us here on The Huffington Post are actually Chinese nationals posing as naive left-wingers, in an attempt to lure real, patriotic Americans like you into a life of Communism and subversion of American interests and ideals.

I know I can trust you, Zen Crusader, because you're obviously an adherent to Buddhism, like all of us. You will be a quick and easy convert for us, maybe even a leader in our cause someday. I've got to go now, and hack the government's computers over at Housing and Urban Development. I need to find some cheap housing in the D.C. area for me and a billion of my closest friends. }

[whatsmyname]

buddhist and so on..... I KNEW IT ... I knew it and what tipped me off was she was just too comfortable in silks and moved much to much graceful like a Chijnuan (sp) dancer. Oh so solly......

[SwingingFromCenter]

Ahhhh, thank you Carl Icahn.

My philosophy of always doing the opposite you do has once again paid off. I shorted on Yahoo :)

[KillTheMessenger]

Icahn't...

[KarateKid]

Goohoo, Inc.