Acquisitions, yahoo, google, jerry yang, microsoft, steve ballmer

Yahoo prepares to give Google 80 percent of the search ad market

As soon as Microsoft CEO Steve Ballmer makes his next move, Yahoo could announce a plan to serve Google ads against Yahoo search results, the Wall Street Journal reports. Yahoo and Google tested such an arrangement in April and it went well enough that Yahoo CEO Jerry Yang believes a longer term deal will appease shareholders enough to keep Yahoo independent.

Of course, if Yang were to announce such a deal, the first thing Ballmer would do is call the Department of Justice to stir up antitrust trouble. So Google and Yahoo plan to make the deal non-exclusive, with Yahoo serving up its search results to the highest bidder — which probably be Google every time.

Combined, Yahoo and Google would make up 80 percent of the search engine market, according to ComScore. Yesterday, Google CEO Eric Schmidt told CNBC a Microsoft-Yahoo merger would give the new company 80 to 90 percent control over the email and instant messaging markets and "eliminate consumer choice."

5:45 PM on Thu May 1 2008
By Nicholas Carlson
2,168 views
6 comments

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Vulture at 09:35 PM on 05/01/08
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I don't get it. Is that a picture from the Special Olympics?
xhooter at 11:00 PM on 05/01/08
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"We're not anti-competitive - we're open." We'll take any ads that monetize higher than google.

Hmm. Seems like there might be a few obvious challenges here:

1. Jerry and Sue kinda have to come up with a new strategy. Good news -- if you work for Stone-Yamashita.

2. How does Hillary Schneider justify having a sales organization? Seems like Yahoo can fire at least a 1000 or more direct sales folks. At a minimum, it raises the bar for them.

3. Why would anyone ever buy another search ad from Yahoo? Is Yahoo throwing in the towel on half of its ad revenue?

4. What value add would yahoo now bring to an ebay or comcast or att? Is Yahoo ceding those too?

5. What does this mean for Y's valuation? If Yahoo becomes a destination site coupled with the right media exchange. As purely a destination, it's probably worth a few billion. Right media **might** be worth another billion. $36 billion seems like a lot.

6. oh, and is it just me, or does it sound like a nose thumbing to the DOJ?
SeanPara at 03:00 AM on 05/02/08
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Dont forget the 1000 odd editors who would go as well
krln99 at 07:05 AM on 05/02/08
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Yang is a moron for dealing with google. Google will fucking bury Yahoo. Their only hope is MS, and I say this who only has one legitimately purchased MS product, the OS that came preloaded with my laptop. Yang and the board need to quit fucking around and deal.
soulpilgrim at 09:09 AM on 05/02/08
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I agree krln99. Just get it done already.
sanfernandovalleywagger at 11:29 AM on 05/02/08
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80% - 90% of the IM market?!? Isn't Google the company that invested in AOL which (at least the last time I checked) owns AIM and ICQ. If you add Gtalk and Skype (owned by eBay) to those two, I think you'll get more than 10% - 20% of the IM market.

As for e-mail, I'm sure that ISPs and corporate accounts are less than 20%. Who pulls these numbers out of their...