Yahoo! divorce’s Microsoft for Google.

Recap

It looks pretty much like a prime time soap. For month’s Microsoft had been negotiating and proposing to Yahoo!, first came with a 31$ buyout offer, later raised it to 33$ trying to make ends meet. But finally Yahoo! pulled off. Again with the help of Icahnn, Microsoft tried to acquire the strategic search portion of Yahoo! The final talks happened on Thursday, and reportedly, Yahoo! were ready to accept the earlier 33$ whole buyout, which Microsoft were no more interested in. Instead, Microsoft were willing to pay 35$ a share for a 16% on Yahoo! to get the search market portion. This Yahoo! found unacceptable and were not even willing to think about. Yahoo! quoted in a press statement “...that such a transaction would not be consistent with the company's view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future, and would not be in the best interests of Yahoo stockholders.” (The trademark “interest of shareholders” argument).
Yahoo! also noted that it was Microsoft who has now moved off the full buyout bid, even at the earlier quoted price. And this followed a heavy 12% dip in Yahoo’s share closing at over 23$.

The Twist
A little while later, Yahoo! announced its new fiancée, Google. It had already struck a 10 year deal with Google to divert some of Google’s search traffic to Yahoo! and is expecting an additional 800$ million revenue this year. But is this the forbidden Apple that Yahoo! is trying to have? Subsequently the story could go such a way that, Yahoo! will become more and more dependent on the Google’s cash, and will not be able to survive without it. Is Google playing the Wolf in the lamb’s skin? We all know Google’s motto of “don’t be evil”, will they keep that word? Only time can tell.
But this is what Google CEO Eric Schmidth had to say, “This agreement will preserve the competitive and dynamic online advertising space.” But how? Hope we find an answer soon.
Now, Google, the new found friend of Yahoo! is also sharing there IM circle with Yahoo! and Yahoo! chat can support Google buddies, clearly an advantage Google deal.
Already the Anti-trust authorities are scrutinizing the deal and pretty skeptical over the happenings.
So what will Google do with this new found friend? Is Yahoo! falling into bigger trap to waiver off immediate slaps from Icahn and Microsoft? How will Microsoft react? What can Icahn do? Wait for the next episode.

-codevalley