Did Icahn Pressure Yahoo into Google's Arms?

 
 
By Clint Boulton  |  Posted 2008-06-12 Email Print this article Print
 
 
 
 
 
 
 


Interesting that hours after Yahoo said talks with Microsoft about a deal were dead, Google and Yahoo confirmed details of a search advertising deal to beat the band.

In April, the two companies conducted a two-week test in which Google ran ads next Yahoo search results. Both companies proclaimed the test a success and many speculated that a deal was imminent.

Now that deal is real, pending approval from the Department of Justice, et al. It calls for Google to run search and contextual advertising technology through its AdSense for Search and AdSense for Content advertising programs on the Yahoo search engine.

What led up to this? Microsoft unsuccessfully bid to buy Yahoo in February; Google's Eric Schmidt said on a call June 12 the Googlehoo talks began in early February. This is no coincidence, folks.

Microsoft came and went from the bargaining table, lastly making waves with a deal to buy only Yahoo's search business. Carl Icahn stepped in to muddy the waters and the deal was seemingly put on hold ... until the Microhoo talks went kaput today.

Yahoo said in a statement the vendors held numerous meetings and conversations regarding a number of transaction alternatives, including a meeting on June 8 that included Yahoo Chairman Roy Bostock and other independent board members from Yahoo.

Yahoo claimed Microsoft officials said they were not interested in buying Yahoo outright. Yahoo countered that selling its search business would leave the company without a search business, an area it has stated repeatedly that it is interested in competing in.

This statement is curious. According to allegations in shareholder lawsuit documents, Yahoo CEO Jerry Yang was averse to doing a deal with Google for the same reason, and now Yahoo has, well, done that feared deal with Google.

This makes me wonder: Is Yahoo being pressured into a deal with Google because of Icahn's threats to hijack Yahoo's board? Maybe Yang really doesn't want to do this deal but feels he has no choice.

Microsoft has been made out to be the bad guy, Icahn is insidious and now Google looks like the winner of an angelically orchestrated agreement to shut Microsoft out of the online ad business.

Microsoft search busness: RIP. 

 
 
 
 
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