Did Google help derail the Microsoft-Yahoo deal?
At the Bits Blog of the New York Times, Saul Hansell says that Google was instrumental in derailing the Microsoft effort to buy Yahoo:
As it turned out, Google was very much the spoiler in the deal. But its most effective weapon was not threats or coercion, but its very effective, and unconventional, use of its own checkbook.
Google has agreed to sell some search advertising for Yahoo. And since Google earns far more on every search than its rivals do, this will mean an immediate increase in Yahoo’s profits.
Microsoft’s chief executive, Steven A. Ballmer, said the prospect of such a deal that could deprive Microsoft of being able to sell all Yahoo’s search ads made proceeding with a hostile takeover less attractive. And Yahoo hopes the promise of a big check each quarter from Google will placate enough shareholders to head off a revolt over its decision to turn down Microsoft’s offer of $33 per share.