“Google Inc.’s enthusiasm has waned in recent days for a potential advertising tie-up that could help Yahoo Inc. try to thwart Microsoft Corp.’s unsolicited takeover offer, people familiar with the matter say,” Kevin J. Delaney reports for The Wall Street Journal.
“A prominent Yahoo shareholder also predicted that the company would have a tough time avoiding Microsoft’s offer, echoing a view of other large investors that Yahoo’s sale to Microsoft is likely, though at a higher price,” Delaney reports.
“Yahoo directors have discussed the idea of a pact with Google, which analysts predict would boost Yahoo’s cash flow, as one of the alternatives that could help the Internet company in any effort to avoid a takeover by Microsoft, these people say. Under such an arrangement, Yahoo would outsource at least part of its search-related advertising to Google in return for a majority of the revenue,” Delaney reports.
“One of the people familiar with the matter cautioned against ruling out a Google advertising pact with Yahoo. But it doesn’t appear likely because of Google’s concerns about the intense regulatory scrutiny it could attract, given Google’s and Yahoo’s significant shares of the Web-search and online-advertising markets, the people say,” Delaney reports.
Delaney reports, “Google’s lack of enthusiasm could narrow Yahoo’s options and reduce its leverage for extracting a higher price from Microsoft.”
Full article here.
MacDailyNews Take: Rather than alerting The Wall Street Journal about their waning enthusiasm, wouldn’t it be in Google’s best interest to at least feign interest in the deal in order to force Microsoft to waste as much as possible on Yahoo? Who are these “people familiar with the matter” talking to the WSJ? Bill Gates and Steve Ballmer?