Hosting News
Google.com & Yahoo.com securing ad revenue, shutting Microsoft.com out
May 12, 2008 |
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The two companies have been discussing an agreement under which Google would
deliver some ads alongside Yahoos search results. Since Google on average earns
much more than Yahoo for every search, the deal, at least in theory, would boost
Yahoos revenue.
The two companies conducted a two-week experiment to make sure that was indeed
true and both companies have called the test a success.
No deal has been announced yet, and the reasons the companies have not come to
terms are unknown. But a person with knowledge of the discussions said Google
has been thinking about a conundrum: deal or no deal, the company could end up
with something of a public relations black eye.
If the companies reach a deal, Google is certain to face antitrust scrutiny.
Eric Schmidt, Googles chief executive, said Thursday that he was confident that
the companies could structure an agreement in a way to avoid it being blocked by
regulators. That may be true. But it doesnt take a public relations expert to
realize that coming under scrutiny as a powerful monopoly, whether or not it
ultimately leads to a deal being blocked, is not good for a companys image.
If Google, on the other hand, pulls away from the deal, it could face some
criticism too. Googles co-founder Sergey Brin said Thursday that Googles offer
of a search ad deal to Yahoo was not an effort to scuttle Microsofts takeover
attempt, but rather an attempt to give Yahoo options in the face of a hostile
takeover attempt. The possibility of a search deal emboldened Yahoos board to
hold out for a higher price. Rather than fight, Microsoft decided to walk away.
But if Google walks away, essentially cutting off the lifeline it had offered
Yahoo, it wont be seen as playing nice.
Spokespeople for Google and Yahoo declined to comment.
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