Google (GOOG) offers Yahoo! (YHOO) a hand

Posted Feb 4th 2008 6:21AM by Douglas McIntyre
Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), News Corp'B' (NWS)

Google (NASDAQ:GOOG) has offered Yahoo! (NASDAQ:YHOO) a hand in keeping Microsoft (NASDAQ:MSFT) off of its back. Google may yet be able to help Yahoo! stay independent.

According to The Wall Street Journal, "Google could potentially offer money, or guaranteed revenue in return for a Yahoo advertising outsourcing pact," It would not be unlike the deal that the big company did with News Corp (NYSE: NWS)'s MySpace. If Yahoo!'s search function went to Google it might well make more money than it can get running its own search business. Google's technology is considered superior in driving results for advertisers.

Having Google handle its search function would also allow Yahoo! to lay off large numbers of employees and cut R&D costs. Yahoo! could use the boost to its margins.

But if Yahoo! tuns into simply a web portal and ad network, the question becomes whether Google in effect owns the company without paying for it. Yahoo! is the No.2 company in search. If that process goes over to its larger competitor it may remain a public company, but it would also be a shell of what the firm once was.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: goog, inthenews, msft, nws, yhoo

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Reader Comments (Page 1 of 1)

2-04-2008 @ 8:11AM

Boards0000000 said...

Did Google even have an interest in Yahoo before Microsoft offered to buy them? No one likes a monopoly and that's how Google is acting. Can't stand the idea they may have some genuine competition if Microsoft/Yahoo merge? I don't like to see a big company try to prevent competition, it's ugly.