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WSJ: Google losing interest in Yahoo bailout

updated 12:00 pm EST, Wed February 13, 2008

Google abandoning Yahoo?

Google may be losing interest in protecting Yahoo from a hostile buyout by Microsoft, says the Wall Street Journal. Sources "familiar with the matter" tell the publication that Google -- long rumored to be involved -- may be concerned about attracting attention from regulators, given that both companies already control vast amounts of web search and advertising. A Google/Yahoo partnership might theoretically constitute a violation of US antitrust law.

Yahoo rejected Microsoft's $44.6 billion bid earlier this week, arguing that it "substantially undervalues" the company in spite of continuing financial woes and the 62 percent stock premium Microsoft is offering. Yahoo has reportedly been hunting for virtually any sort of deal to at least increase its selling price, even turning to once-failed merger partner AOL.

The odds are not in Yahoo's favor, argues noted portfolio manager Bill Miller. Speaking on behalf of Legg Mason Inc., he comments that "it will be hard for [Yahoo] to come up with alternatives that deliver more value than [Microsoft] will ultimately be willing to pay." Yahoo is not in a good negotiating position, he adds, even if Microsoft may have to improve its bid at this stage. Miller has also met with both Microsoft CEO Steve Ballmer and Yahoo CEO Jerry Yang, and confirms that the companies are trying to use powerful shareholders to further their ends.




by MacNN Staff

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Comments

  1. climacs

    Joined: Dec 1969

    0

    was never going to happen

    can't see how Google could ever have pulled off an alliance with Yahoo. Seemed fairly obvious that it would attract anti-trust attention.

  1. bhuot

    Joined: Dec 1969

    0

    ms + yahoo illegal

    How about Microsoft who already is a monopoly in the hardest area it is to switch - operating systems and office suites? Microsoft buying Yahoo would be spreading its monopoly to the point of having near total control of information in general.

  1. climacs

    Joined: Dec 1969

    0

    not exactly

    while it might still attract gov't attention, Microsoft is way behind in the specific market of online advertising and search engines. "Information" doesn't exactly cut it with anti-trust regulators, as far as being a market.

  1. Guest

    Joined: Dec 1969

    0

    The real concern...

    There are likely few reasons for regulators to oppose a Microsoft-Yahoo tie-up based in advertising or search. However, their combined strength in email and IM (which could naturally extend to VoIP) should be given serious consideration.

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