Microsoft Alerted As Google Dumps Yahoo Ad Deal

Surely now Microsoft beckons...?

Suddenly it seems appropriate for that exclamation mark on the end, doesn’t it Yahoo!…

As the title of this story spells out, the Google Yahoo! Ad deal which saw the former’s AdSense for Search service integrated into Yahoo results has been pulled.

Speaking about its decision, Google explained: “after four months of review, including discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long-term interests of Google or our users, so we have decided to end the agreement.”

Why is all this so significant? Well gather round my children, Gordon shall explain.

In short, the package was seen as ”the” single largest reason Yahoo! executives managed to appease shareholders keen to leap on the lucrative $44.9bn Microsoft takeover bid in February. This sum was subsequently raised by $5bn to $49.6bn which placed a considerable premium on Yahoo’s crumbling stock price, rating it at about $33 per share. Now given Yahoo! shares are now valued at just $14 per share, quite what the end of the Google deal will do to this doesn’t bear thinking about.

Of course – recession or no recession – this development once again opens up Yahoo! to another Microsoft bid. Furthermore, with the markets the way they are the irony is idealistic principles are unlikely to save Yahoo! CEO Jerry Yang this time and his baby may well be sold from under him… at a much lower price.

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