This, i guess was always in the offing. Just read an article in NYtimes.com on a proposed Google Yahoo deal for search advertising. It may be a way to fend of Microsoft bids for Yahoo, but it sure does raise many questions pertaining to Anti Trust issues and also an apprehension over the Yahoo - Live.com search sponsored results ie. yahoo's ads on Live.com.
Google Inc.'s top executives expressed hope Thursday that the Internet search leader will be able to form a potentially lucrative advertising partnership with Yahoo Inc.
"We have been talking to Yahoo and we are very excited to be working with them," said Google co-founder, Sergey Brin. ''We share a lot of values with them.''
Neither Brin nor Google Chairman Eric Schmidt mentioned how far along the two sides are in their negotiations after a two-week test which was completed last month. During the trial run, Google supplied a small portion of the text-based ads that appeared alongside the search results on Yahoo's Web site.
Because Google's technology proved it, the alliance could help Yahoo snap out of a prolonged slump that made it vulnerable to Microsoft's buyout bid. Microsoft also cited Yahoo's willingness to subordinate its own ad system to Google's as a reason for dropping its bid.
"We really believe in companies having choices about their destinies," Brin said. "It's not about scuttling (the deal). They were under a hostile attack and we wanted to make sure they had as many options as possible."
Schmidt left little doubt that Google was pleased to ruin the deal. However, he said he wanted to keep Yahoo out of Microsoft's hands largely because he was concerned the world's largest software maker would abuse the added power.
Schmidt described Google's current relationship with Yahoo as "very, very friendly."
If Yahoo were to sign a long-term ad deal with Google, some analysts believe that would repel Microsoft for good. Although Microsoft executives have publicly indicated they are looking for other ways to bolster the software maker's unprofitable Internet operations.
This partnership almost certainly would face intense antitrust scrutiny as the two companies together control more than 80 % of the U.S. market for online search advertising.
"If there were a deal (with Yahoo), we would anticipate structuring the deal to address the antitrust concerns that have been widely discussed," Schmidt said.
Although Schmidt wouldn't specify how Google will address the antitrust issues, analysts speculate, that it could be done by running the partnership as an auction-style system that would allow other rivals, to show ads on Yahoo.
Google shareholders attending Thursday's meeting didn't seem to care about the implications of a potential Yahoo partnership.
Now i wonder what is brewing in the the Silicon valley.
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