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
Source: Wall Street Journal