Yahoo Messing With Microsoft, Google, AOL & Shareholders or Messing With Themselves?

Apr 10, 2008 • 8:48 am | comments

(2) by Barry Schwartz | Filed Under Search Engine Industry News

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The saga continues with a very unusual night for Yahoo yesterday. Let me catch everyone up with what happened yesterday. Follow the timeline, all reports are linked via Search Engine Land (times are estimates and EST):

15:00 (EST) - Confirmed: Yahoo To Test Google AdSense For Search Ads, has confirmed reports from Yahoo that they will be testing Google's ad on Yahoo.com search results in the US for a 2 week period.
16:00 (EST) - Microsoft: Forget It On Paid Search Partnership, Google & Yahoo, has a response from Microsoft that they will take them to court if they made an ad deal with Yahoo. Basically, it would give Google a 90% or more share of the search ad space.
21:30 (EST) - Report: Yahoo & AOL Approaching A Deal, has a second report from the WSJ that now even thought they are testing things with Google and Microsoft wants them, they may make a deal with AOL to bring in the AOL division in exchange for a cash investment.
22:00 (EST) - News Corp, Google, AOL, "MicroHoo" The Movie Enters A Surreal, Climactic Sequence, now we have reports from the NY Times that News Corp is interested in joining forces with Microsoft to make a bid for Yahoo.

Got all that, now that all happened in a 12 hour period yesterday. It was like, a wow, after a wow, after a wow and then another wow!

Michael Arrington thinks Yahoo is making a huge mistake:

It’s time to end this thing before Yahoo ends itself. I don’t care if they throw AOL, MySpace, and half the rest of the Internet into the deal along with Yahoo. But the health of the Internet demands a counter balance to Google.

He now says, "Yahoo-Microsoft, given the current state of things, is the only reasonable outcome."

I wonder what the major shareholders are thinking right now, especially after Yahoo's second largest investor, Legg Mason backed Yahoo against Microsoft, only now to have to deal with all this crazy news.

How will this impact SEMs? It is unclear right now. But if Google does power Yahoo's search ads, then it will make Google even stronger and that quality score and the Google slap can impact more SEMs then ever. Of course, it will give SEMs once less search ad company to master.

Forum discussion at these following threads: