Did Icahn Pressure Yahoo into Google's Arms?
Interesting that hours after Yahoo said talks with Microsoft about a deal were dead, Google and Yahoo confirmed details of a search advertising deal to beat the band. In April, the two companies conducted a two-week test in which Google ran ads next Yahoo search results. Both companies proclaimed the test a success and many speculated that a deal was imminent. Now that deal is real, pending approval from the Department of Justice, et al. It calls for Google to run search and contextual advertising technology through its AdSense for Search and AdSense for Content advertising programs on the Yahoo search engine. What led up to this? Microsoft unsuccessfully bid to buy Yahoo in February; Google's Eric Schmidt said on a call June 12 the Googlehoo talks began in early February. This is no coincidence, folks. Microsoft came and went from the bargaining table, lastly making waves with a deal to buy only Yahoo's search business. Carl Icahn stepped in to muddy the waters and the deal was seemingly put on hold ... until the Microhoo talks went kaput today. Yahoo said in a statement the vendors held numerous meetings and conversations regarding a number of transaction alternatives, including a meeting on June 8 that included Yahoo Chairman Roy Bostock and other independent board members from Yahoo. Yahoo claimed Microsoft officials said they were not interested in buying Yahoo outright. Yahoo countered that selling its search business would leave the company without a search business, an area it has stated repeatedly that it is interested in competing in. This statement is curious. According to allegations in shareholder lawsuit documents, Yahoo CEO Jerry Yang was averse to doing a deal with Google for the same reason, and now Yahoo has, well, done that feared deal with Google. This makes me wonder: Is Yahoo being pressured into a deal with Google because of Icahn's threats to hijack Yahoo's board? Maybe Yang really doesn't want to do this deal but feels he has no choice. Microsoft has been made out to be the bad guy, Icahn is insidious and now Google looks like the winner of an angelically orchestrated agreement to shut Microsoft out of the online ad business. Microsoft search busness: RIP. |
Comments (2)
Yang is simply trying to keep from being ousted. Whether Icahn came along or not, current shareholders through the numerous law suits filed are expressing their displeasure with Yang. He didn't want a deal with Google before all this started and he really doesn't want one now. He is simply trying to save face. But it's too late.
This deal with Google is the same as Yang admitting he couldn't do it his way.
Posted by Bill Brock | June 13, 2008 12:18 PM
I think Clint Boulton, has it mostly right with why "Did Icahn Pressure Yahoo into Google's Arms?" My only question is, how much Icahn and Steve Ballmer were/are working together to try to take over Yahoo? Or perhaps Icahn is possibly another pawn like Microsoft used SCO to do their dirty work? At the very least, Steve Ballmer at least tried to foster someone like Icahn to do this to put the heat on Yahoo.
Now it has backfired, as a lot of Steve's plans has lately. Google and Yahoo, are to some extent, uniting against the Borg. Yahoo will most likely get enough cash to help it fend off the Icahn attack as well. And in the end, MS creates another enemy.
And this cannot be a good thing for MS, at a time when they are spending huge amounts of money building huge data centers around the world, with the intending use of taking over the internet, or at least the search and advertising end of it. Maybe, Microsoft could rent out those new datacenters to Google, LOL.
Posted by chips | June 13, 2008 1:14 PM