Yahoo deal: New options emerge
As the Yahoo takeover saga rumbles on, there are fresh reports of alternatives to a Microsoft takeover being discussed.
Anonymous sources close to the situation say that in addition to the $42 billion Microsoft offer, a Microsoft-News Corp. and a News Corp. only deal are on the negotiating table.
News Corporation, the media company owned by Rupert Murdoch, had previously ruled themselves out of the running, apparently leaving the way clear for Microsoft. Although they now appear to have rejoined the race, details of how a News Corp. bid would be structured are unclear.
Ideally, Microsoft would still prefer to complete its original takeover bid on its own, the value of which has reduced in real terms from $44.6 billion to $42 billion due to falls in Microsoft’s share price since March.
AOL-Yahoo
The Wall Street Journal also reports that Yahoo’s board has been in negotiations with AOL Time Warner over a potential merger deal.
If an AOL-Yahoo tie-up went ahead, it is speculated that Yahoo might attempt to outsource search to Google; though this would likely be the focus of intent regulatory scrutiny as it would leave Google with around 80 percent of the search market.
Assuming that Google handling Yahoo’s search business was viable, Wired notes that advertisers could end up paying more for pay-per-click ads.
“The average cost per click on Google is higher than Yahoo,” commented Zorik Gordon, CEO of ad provider ReachLocal. “If you apply Google rates for the same search terms on Yahoo, you’re going to be paying more than you were the day before.”
Earlier this month Microsoft wrote to Yahoo’s board stating that it would not be increasing the takeover offer that was rejected last month as the amount tabled was a ‘fair price’. In the context of how important Yahoo’s share of the search market is to Microsoft’s online ambitions, the news that there may be other equally viable alternatives for Yahoo might just test Microsoft CEO Steve Ballmer’s resolve over the coming weeks.
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