Yahoo seeks reinforcements from AOL and Google
Search engine operator Yahoo could soon take over AOL’s Internet business. As the Wall Street Journal reports, citing informed circles, negotiations are said to be taking place between Yahoo and AOL owner Time Warner. The aim is to transfer AOL’s Internet division to Yahoo, while Time Warner would take over shares in the search engine operator in return. The access business is to remain excluded from the transaction. At the same time, Yahoo announced a trial partnership with Google, allowing the latter to place ads on its competitor’s website.
With its recent activities, Yahoo seems to want to underscore its rejection of the takeover bid made by Microsoft. Some analysts see this as at least a way to drive up the acquisition price for Microsoft. The planned deal with AOL sees among other things the repurchase of Yahoo stocks worth several billion dollars. The purchase price of 30 to 40 dollars per share should therefore be above Microsoft’s offer. On the other hand, last weekend Microsoft gave Yahoo a deadline of three weeks within which the takeover candidate should make a final decision. If the offer is still rejected, Microsoft promises a reduction in the purchase price and also wants to contact Yahoo shareholders directly. A final decision on a possible transaction has not yet been made.
Due to the weaker economic prospects, the online advertising business will also not develop as rapidly as before, which is why consolidation tendencies should be viewed positively, says Marcus Sander, analyst at Sal. Oppenheim, in a press release. “A pooling of forces against Google therefore makes economic sense in any case, also against the background of the economic slowdown.” This applies to a cooperation between Yahoo and AOL as well as between Yahoo and Microsoft. “Yahoo and AOL in particular have clearly lost market shares in the online advertising market compared to Google in recent years,” explains Sander. AOL in particular has lost its originally strong market position in the access business and relies almost exclusively on the portal and advertising business.
As announced yesterday, Wednesday, the two search engine operators have planned a two-week collaboration during which Yahoo will test Google’s text ad system AdSense. This allows Google to advertise three percent of Yahoo’s search results. Microsoft judges the cooperation between Google and Yahoo critically. “Any specific agreement between Yahoo and Google would put more than 90 percent of the online advertising market in Google’s hands,” Microsoft said. Competition experts also doubt that long-term cooperation between the two search engine operators would be permitted by competition watchdogs. A cooperation between Google and Yahoo is conceivable in a loose cooperation, but any deeper cooperation should be virtually impossible under competition law, according to Sander. Meanwhile, Microsoft is seeking support from Rupert Murdoch’s News Corp., the Wall Street Journal reports. The two companies would have serious discussions about a possible joint offer.pte