Google and Yahoo Make Sweet Love

It appears something interesting is happening in the valley other than iPhone mania and economic nail-biting. After over a month of failed talks between Microsoft and Yahoo that resulted in Microsoft packing up and taking their business elsewhere, it appears that Yahoo has taken a step towards bringing some of Google’s advertising business in to help make ends meet.

With pressure mounting on the board and in particular their Chief Executive, Jerry Yang, the time to make sure the shareholders know that turning down Microsoft was the right decision is short. Microsoft’s offer of $47.5 billion or $33 per share was turned down with a request from Jerry Yang for Microsoft to up the bid to $37 per share. In response, Microsoft simply packed up their bags and skipped out of down with a shrug and a grin.

This new deal, struck with their biggest rival Google, would give Google the ability to bring their ads to Yahoo’s pages in multiple countries using their unrivaled search engine’s power. This deal has not yet approached the often intense review from antitrust authorities and it’s expected to hit some serious review prior to approval.

This decision came with a 10 percent drop in Yahoo’s stock prices, giving evidence to the notion that many stock holders were keeping their stock in hopes that Microsoft would renew talks with the search giant. A mutiny has been speculated involving activist Carl Icahn whom has made strong comments towards the board of directors, including issuing vows and threats to overthrow the board over disagreement with their decision in response to the Microsoft offer. Any resistance to this notion by unhappy investors is brought on by the promise from the board to insure that their company is able to stand on its own two legs and provide growing profit for the foreseeable future.

Good luck Yahoo, you’re going to need it.

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Ryan Matthew Pierson