Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), News Corp’B’ (NWS)
Google (NASDAQ:GOOG) has offered Yahoo! (NASDAQ:YHOO) a hand in keeping Microsoft (NASDAQ:MSFT) off of its back. Google might yet be able to help Yahoo! stay independent.
According to The Wall Street Journal, “Google could potentially offer money, or guaranteed revenue in return for a Yahoo advertising outsourcing pact,” It wouldn’t be unlike the deal that the huge company did with News Corp (NYSE: NWS)’s MySpace. If Yahoo!’s search function went to Google it might well make more money than it can get running its own search business. Google’s technology is considered better in driving results for advertisers.
Having Google handle its search function would also allow Yahoo! to lay off big numbers of employees and cut R&D costs. Yahoo! could use the boost to its margins.
But if Yahoo! tuns into simply a web portal and ad network, the question becomes whether Google in effect owns the company without paying for it. Yahoo! is the No.2 company in search. If that process goes over to its bigger competitor it might remain a public company, but it would also be a shell of what the firm once was.
Douglas A. McIntyre is an editor at 247wallst.com.
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