Posted June 3, 2008 10:33 am by with 13 comments

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Do desperate times really call for desperate measures?

It does, if you’re a company facing a hostile acquisition by Microsoft!

Just one day before Microsoft made its bid for Yahoo, executives dismissed any notion of partnering with Google on search ads. According to Reuters:

Bracing for employee questions over whether Yahoo should outsource its search-ad sales to Google, executives were prepared to argue that any short-term gains would derail Yahoo’s long-term push to become a "must buy" for advertisers.

"Short-term analysis of the revenue potential of outsourcing monetization may not take into account the longer term impact on the competitive market if search becomes an effective monopoly," an excerpt from the company document said.

Just a week or two later, Yahoo had reversed course and announced it would seek a partnership with Google.

The internal Yahoo documents were unsealed by a judge now the whole world knows that Yahoo’s talks with Google are nothing more than an attempt to keep Microsoft at bay.

Now that investors know Yahoo executives saw only short-term benefits–and long-term negatives–from a Google deal, will they once again push for Yahoo to go back to the negotiation table with Microsoft?

  • And so the Yahoo story continues! Personally I want Microsoft to acquire Yahoo so Google will have more competition in the search market.


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  • Dean

    @iPod Touch

    Frankly, I see a MSFT-Yahoo marriage as giving Google a greater advantage especially in the short term. It might takes months (years?) for MSFT to sort out the cultural difference while integrating the two companies – especially when one of them doesn’t was to be integrated 😉

  • Whatever happens we will embrace it. Competition creates better service and more demand.

  • Dean

    @ Goran

    Who exactly is “we”?

    I would only switch if it was incrementally better than Google (like I did when I switched from IE to Firefox). Do you honestly think a MSFT-Yahoo marriage is going to a better search engine? I mean they’d probably have to pay me to use it, but what kind of marketing stooge would think that would work?….errr…nevermind

  • Why Yahoo don’t want to be just friends with MS?

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  • I’d imagine they would. Looks like Ballmer and Microsoft weren’t the only ones that noticed the negatives.

  • I agree with Dean. People know how reliable Google is and it will take a while for them to notice if Live Search is better. Once they notice they will change but people generally don’t like change.

    It took me a while to change to Firefox. I still use IE every now and then though!


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  • Yahoo is in desperate need of a clear set plan for the way ahead. They seem to be desperately grasping at straws, and this hardly inspires investor confidence.

  • I agree with people above. The more competition on the market the better for us.

  • But Google is getting huger…One big competitor will do the fight better than several small players.

  • Yahoo + Google against Microsoft?
    Microsoft want to be a leader in the SE business, but time is spend.

  • Dean

    Just one more thought…

    I think Google’s biggest “competitor” might just be the Government whom at some point might start looking at Google’s dominance in the market as a monopolistic issue and see the need to reign them in.

    I have zero belief that either MSFT, Yahoo, or MicroHoo have the savvy to significantly dent Google momentum. They are both, too distracted and too desparate.

  • That whole Y+G partnership smelled funny from the beginning. Although with the the whole delayed beta of Yahoos version of AdSense did give the story a smidgen of credibility.

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