Google Eyes Up Microsoft Bid

Google is rumoured to be lining up a bid to purchase Yahoo

from under the noses of Microsoft which could have serious implications for the

future of the Bing search engine.

A report in the Wall Street Journal suggests that Google has

spoken to at least two private equity firms about financially backing a bid to

purchase the ailing online portal.

However, any bid by Google to purchase Yahoo would be sure

to attract the attention of regulatory bodies across the globe, considering

Google is already under investigation for antitrust violations by the Federal

Trade Commission in the US

as well as the European Commission in Europe.

In the US,

Google currently has around 65 per cent of the search market, which would be

boosted to a monopolistic 80 per cent should it succeed in its purchase of

Yahoo. Leaving Bing with a patlry 14 per cent.

Reports emerged last week that Microsoft is also considering

a potential joint bid for Yahoo and has been in discussions with

privates-equity firms, Silver Lake Partners and the Canada Pension Plan

Investment Board. This type of deal which would see Microsoft extending loans to them and then

buying preferred stock in Yahoo. This situation would allow Microsoft to recoup its

investment before owners of common stock and some other types of investors.

Back in 2008, antitrust lawyers for the FTC thwarted a

web-search advertising partnership deal between Google and Yahoo and instead in

2009 Yahoo signed a 10-year deal with Microsoft.

Google’s renewed interest in Yahoo would see them attempt to

sell advertising across Yahoo’s websites, as well as opening up Google+ to

Yahoo’s 700 million monthly unique visitors. In the US, Google

trails the likes of Facebook and Yahoo itself in terms of display-ad revenue and this deal would help it boost its position.

Yahoo last month fired its CEO Carol Bartz and has since been

shopping itself to potential buyers, which could see the company taken off the

public markets as it tries to turn its fortunes around.

With Microsoft’s online division continuing to make a loss,

albeit with revenues growing, it will see a partnership with Yahoo as a way of

expanding its online presence and challenging Google for dominance in the

search market.

Source: Wall Street Journal