Google pulls out of Yahoo ad deal, Microsoft waits

In the latest blow to Yahoo, Google has backed off its plan to form an advertising partnership with the smaller web company. As the AP reports, the decision comes after the U.S. Justice Department vowed to block the Yahoo deal in order to “preserve competition” in the online advertising market. Google Chief Legal Officer David Drummond said in a statement, “We’re not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on.” Google had already raised a few eyebrows among regulators with its purchase of online ad firm DoubleClick in March.

The AP notes that Yahoo counted on the Google deal to add $800 million to its revenue and “placate shareholders still riled up about the failure of the Microsoft deal.” As you might recall, the company gave activist investor Carl Icahn a seat on its board after he threatened to get Yahoo’s directors fired in order to resume merger talks with Microsoft.

Speaking of Microsoft, Google’s arch-nemesis has reportedly “spent a lot of time and money trying to keep Google and Yahoo from coming together.” The AP says the folks in Redmond tried to persuade regulators that the deal would hurt competition in the ad market, and they urged other advertisers to file formal complaints. With Google now out of the picture, Yahoo may have no choice but to come crawling back to Steve Ballmer—and agree to a buyout for less than the $33-per-share he originally offered. Yahoo’s share price currently sits at around $14.31, up about a dollar on hopes of a deal with Microsoft.

Comments closed
    • radioactive21
    • 11 years ago

    Total BS. Google waited out the double click deal and it was much much worst then this could ever be.

    The reason google pulled out is because yahoo is in deep finanical shit. If google pulls out they can hope that yahoo stock falls to $1 and some change. At that point google can just buy out yahoo and make it worth more.

    Microsoft has to be sighing in relief. They just saved close to 70%, possible more since yahoo stock will continue to drop.

    Microsoft and Google are going to fight over who buys Yahoo. I say Microsoft wins the deal for $10 a share, this is after Yahoo stock has droped below $2/share.

    • Xenolith
    • 11 years ago

    This sucks. Yahoo should be allowed to be independent. Greedy investors are destroying Yahoo. So much for competition.

      • A_Pickle
      • 11 years ago

      I hate Yahoo. The sooner that internet-ruining company is just piles of smoldering rubble the better. Idiocy, inane toolbars, and software on the questionable fringe of ad/spyware are reasons why Yahoo needs only look into a mirror to understand it’s current predicament.

    • Farting Bob
    • 11 years ago

    Yahoo’s best case scenario is to cling onto at least some of its users for as long as possible. It is very unlikely to grow much in any sector now.

      • BobbinThreadbare
      • 11 years ago

      You know, I don’t use yahoo search, but I use a lot of their other services. Fantasy sports, email. If they would make their news, video, and music services more compelling, I would use those too. They should just concede defeat in terms of searching and concentrate on value added services.

    • no51
    • 11 years ago

    Yahoo is totally worth at least 36$ a share!

    • Traz
    • 11 years ago

    sucks to be Yahoo…

      • ssidbroadcast
      • 11 years ago

      Yeah Yahoo is really caught between two fires…

Pin It on Pinterest

Share This