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Article

Title: Yahoo Weighs Outsourcing Search Ads to Google

Author: Kopytoff, Verne Article Type: Product Analysis
Source: San Francisco Chronicle, pC1(2) Publication Date: Feb 9, 2008
URL of Publication: http://www.sfgate.com

The board of Yahoo! Inc., hoping to keep the company independent of Microsoft Corp., which offered to take over the company last week, has discussed outsourcing its search engine advertising to Google Inc. This option is among several discussed. This discussed plan involves Yahoo! cutting its own search ad business along with related staff, taking on Google as a supplier of such ads and sharing the revenue generated from them. The goal is to cut costs and increase cash flow. Analysts believe that only radical measures, such as the plan, could cure the Yahoo!'s ailing finances and many believe Yahoo! stands only a small chance of avoiding Microsoft's takeover bid, which puts a 62 percent premium on Yahoo!'s shares. No other companies have offered to bid on Yahoo! severely restricting the company's options. Yahoo! has said that it is considering Microsoft's offer among other options, but the board has a legal obligation to maximize shareholder value, which may force it to negotiate with Microsoft. Concerns raised about the possibility of a Yahoo!-Google partnership include anti-trust issues and the possibility of unintended losses of revenue.

Companies:
Google Inc Microsoft Corp
TecTerms Yahoo! Inc

Products:
Search Engine Marketing

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