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Yahoo Embrace Google, Keeps Microsoft Waiting Forever
U.S. search engine Yahoo and its archrival Google have finally agreed on an Internet advertising partnership. Google and Yahoo claim that they have reached an agreement under which Google would deliver ads next to some of Yahoo's search results and on some of its websites in the United States and Canada.
The companies recently ran a series of successful tests ensuring technological compatibility. Yahoo, in a statement released recently, predicts a windfall of USD 800 million in additional ad revenues boosting cash flows to USD 450 million within 12 months. Yahoo and Google ads would be pitted against each other in an auction style allowing advertisers to select the provider they want. The agreement also applies to current partners in Yahoo's publisher network.
"We believe that the convergence of search and display is the next major development in the evolution of the rapidly changing online advertising industry. Our strategies are specifically designed to capitalize on this convergence, and this agreement helps us move them forward in a significant way. It also represents an important next step in our open strategy, building on the progress we have already made in advancing a more open marketplace," said Yahoo CEO and co-founder Jerry Yang.
The companies said they didn't have to receive regulatory approval but would wait for three and a half months before kicking off the partnership so that the government could review the arrangement. Herb Kohl, chairman of the U.S. Senate Antitrust Subcommittee, said his panel plans to investigate the competitive and privacy implications of the Yahoo-Google deal, as its consequences for advertisers and consumers could be far-reaching.
This announcement came into being just hours after Yahoo officially bust up with Microsoft, who made a 44.6 billion dollar unsolicited offer to take over Yahoo in February and then said it would only buy its search business, but the proposals were rejected by Yahoo management.
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