Google Hopes For Long-term Ad Deal With Yahoo
Google's executives expressed hope Thursday that the Internet search leader will be able to form a potentially advertising partnership with Yahoo, a deal that would lower the odds of Microsoft renewing its attempts to buy Yahoo.
"We have been talking to Yahoo and we are very excited to be working with them," Google co-founder Sergey Brin told reporters before the company's annual shareholders meeting. "We share a lot of values with them."
Neither Brin nor Google Chairman Eric Schmidt would indicate how far along the two sides are in their negotiations after a two-week test was completed last month. During the trial run, Google supplied a small portion of the text-based ads that appeared alongside the search results on Yahoo's Web site.
Because Google's technology proved it could select more profitable ads, the alliance could help Yahoo snap out of a prolonged slump that made it vulnerable to Microsoft's unsolicited buyout bid. Microsoft orally raised the bid to $47.5 billion, or $33 per share, before pulling it off the table last weekend.
Microsoft cited Yahoo's willingness to subordinate its own ad system to Google's as a major reason for dropping its bid.
Google suggested the ad partnership to Yahoo as a weapon to fend off Microsoft.
Schmidt left little doubt that Google was pleased to spoil the deal, however. He said he wanted to keep Yahoo out of Microsoft's hands largely because he was concerned the world's largest software maker would abuse the added power it would acquire in e-mail and instant messaging to limit consumer choices.
If Yahoo were to sign a long-term ad deal with Google, some analysts believe that would repel Microsoft for good. Although Microsoft executives have publicly indicated they are looking for other ways to bolster the software maker's unprofitable Internet operations, some investors still suspect another bid may surface if Yahoo continues to struggle in the months ahead.
A partnership between Google and Yahoo almost certainly would face intense antitrust scrutiny because the two companies together control more than 80 percent of the U.S. market for online search advertising. The U.S. Justice Department has already made inquiries about the two-week test they conducted.
Neither Brin nor Google Chairman Eric Schmidt would indicate how far along the two sides are in their negotiations after a two-week test was completed last month. During the trial run, Google supplied a small portion of the text-based ads that appeared alongside the search results on Yahoo's Web site.
Because Google's technology proved it could select more profitable ads, the alliance could help Yahoo snap out of a prolonged slump that made it vulnerable to Microsoft's unsolicited buyout bid. Microsoft orally raised the bid to $47.5 billion, or $33 per share, before pulling it off the table last weekend.
Microsoft cited Yahoo's willingness to subordinate its own ad system to Google's as a major reason for dropping its bid.
Google suggested the ad partnership to Yahoo as a weapon to fend off Microsoft.
Schmidt left little doubt that Google was pleased to spoil the deal, however. He said he wanted to keep Yahoo out of Microsoft's hands largely because he was concerned the world's largest software maker would abuse the added power it would acquire in e-mail and instant messaging to limit consumer choices.
If Yahoo were to sign a long-term ad deal with Google, some analysts believe that would repel Microsoft for good. Although Microsoft executives have publicly indicated they are looking for other ways to bolster the software maker's unprofitable Internet operations, some investors still suspect another bid may surface if Yahoo continues to struggle in the months ahead.
A partnership between Google and Yahoo almost certainly would face intense antitrust scrutiny because the two companies together control more than 80 percent of the U.S. market for online search advertising. The U.S. Justice Department has already made inquiries about the two-week test they conducted.
